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AMEH.. $0.1288.. Apollo Medical Holdings, Inc. Appoints Edward "Ted" Schreck as Chairman of Its Board of Directors
GLENDALE, Calif., Feb. 16, 2012 /PRNewswire/ -- Apollo Medical Holdings, Inc. ("ApolloMed") (OTC-AMEH.PK), a leading provider of hospitalist, critical care and multi-disciplinary care management services to the healthcare community, today announced the appointment of Edward "Ted" Schreck as Chairman of its Board of Directors.
Mr. Schreck is a senior health care executive whose career spans over 37 years in both the private and public sectors. He joined Tenet Healthcare Corporation in 1998 as CEO of USC University Hospital and USC/Norris Cancer Hospital. Under his leadership, both USC University Hospital and USC/Norris achieved significant growth and clinical program development. In 2000, he was promoted to Regional Vice President of Operations, charged with leading a group of ten Los Angeles-area hospitals. Two years later, he was promoted to Senior Vice President of Operations. Mr. Schreck returned as CEO of USC University Hospital and USC/Norris Cancer Center in 2004.
Prior to joining Tenet, Mr. Schreck worked for the St. Joseph Health System, serving as CEO of Santa Rosa General Hospital and Senior Vice President of Santa Rosa Memorial Hospital, and for Sutter Health System as CEO of Delta Memorial Hospital. He also served as CEO of the Eden Township District Hospitals.
Mr. Schreck retired in 2006 but returned to work as a consultant for Portland-based Legacy Health System, which operates five hospitals, a research facility, a hospice agency, and specialty and primary care clinics. Most recently, he served on the board of Los Angeles Orthopaedic Hospital, a member of the UCLA Health System.
Mr. Schreck earned his Bachelor's degree at UCLA and holds a Master's and Doctorate from USC, the latter from the Price School of Public Policy.
"We are honored that Ted has joined our Board," stated Warren Hosseinion, M.D., Chief Executive Officer of Apollo Medical Holdings, Inc. "He has a proven track record of success. His extensive experience in hospital and executive management make him an ideal leader for ApolloMed."
"I'm delighted to be a part of the ApolloMed team, and excited about their vision for integrated medical management services," stated Ted Schreck, Chairman of the Board. "ApolloMed is a pioneer in developing new strategies and innovations for achieving effective, high quality patient care. I believe ApolloMed will make significant contributions for its patients and its hospital, medical group and health plan clients."
About Apollo Medical Holdings, Inc.
ApolloMed is a leading provider of integrated medical management services that improves the quality and efficiency of inpatient hospital care plus multi-disciplinary care management services targeting inefficiencies in healthcare payer and provider networks. The Company's integrated model combines hospitalist medicine, critical care medicine, 24-hour physician call centers, case management and transition management that offers to help healthcare organizations engage in performance payments for utilization efficiency, quality of care objectives and shared accountability arrangements. The company's strategy is to capitalize on the growing market for hospital-based physicians and care management services. There are currently 4900 acute care hospitals in the U.S., with more than 35 million annual admissions. Total U.S. spending on hospital care currently exceeds $650 billion, and is expected to increase to $1.3 trillion by 2016.
For more information, please visit our website: www.apollomed.net
SOURCE Apollo Medical Holdings, Inc.
AMEH.. $0.1288.. Apollo Medical Holdings, Inc. Appoints Edward "Ted" Schreck as Chairman of Its Board of Directors
GLENDALE, Calif., Feb. 16, 2012 /PRNewswire/ -- Apollo Medical Holdings, Inc. ("ApolloMed") (OTC-AMEH.PK), a leading provider of hospitalist, critical care and multi-disciplinary care management services to the healthcare community, today announced the appointment of Edward "Ted" Schreck as Chairman of its Board of Directors.
Mr. Schreck is a senior health care executive whose career spans over 37 years in both the private and public sectors. He joined Tenet Healthcare Corporation in 1998 as CEO of USC University Hospital and USC/Norris Cancer Hospital. Under his leadership, both USC University Hospital and USC/Norris achieved significant growth and clinical program development. In 2000, he was promoted to Regional Vice President of Operations, charged with leading a group of ten Los Angeles-area hospitals. Two years later, he was promoted to Senior Vice President of Operations. Mr. Schreck returned as CEO of USC University Hospital and USC/Norris Cancer Center in 2004.
Prior to joining Tenet, Mr. Schreck worked for the St. Joseph Health System, serving as CEO of Santa Rosa General Hospital and Senior Vice President of Santa Rosa Memorial Hospital, and for Sutter Health System as CEO of Delta Memorial Hospital. He also served as CEO of the Eden Township District Hospitals.
Mr. Schreck retired in 2006 but returned to work as a consultant for Portland-based Legacy Health System, which operates five hospitals, a research facility, a hospice agency, and specialty and primary care clinics. Most recently, he served on the board of Los Angeles Orthopaedic Hospital, a member of the UCLA Health System.
Mr. Schreck earned his Bachelor's degree at UCLA and holds a Master's and Doctorate from USC, the latter from the Price School of Public Policy.
"We are honored that Ted has joined our Board," stated Warren Hosseinion, M.D., Chief Executive Officer of Apollo Medical Holdings, Inc. "He has a proven track record of success. His extensive experience in hospital and executive management make him an ideal leader for ApolloMed."
"I'm delighted to be a part of the ApolloMed team, and excited about their vision for integrated medical management services," stated Ted Schreck, Chairman of the Board. "ApolloMed is a pioneer in developing new strategies and innovations for achieving effective, high quality patient care. I believe ApolloMed will make significant contributions for its patients and its hospital, medical group and health plan clients."
About Apollo Medical Holdings, Inc.
ApolloMed is a leading provider of integrated medical management services that improves the quality and efficiency of inpatient hospital care plus multi-disciplinary care management services targeting inefficiencies in healthcare payer and provider networks. The Company's integrated model combines hospitalist medicine, critical care medicine, 24-hour physician call centers, case management and transition management that offers to help healthcare organizations engage in performance payments for utilization efficiency, quality of care objectives and shared accountability arrangements. The company's strategy is to capitalize on the growing market for hospital-based physicians and care management services. There are currently 4900 acute care hospitals in the U.S., with more than 35 million annual admissions. Total U.S. spending on hospital care currently exceeds $650 billion, and is expected to increase to $1.3 trillion by 2016.
For more information, please visit our website: www.apollomed.net
SOURCE Apollo Medical Holdings, Inc.
AMEH.. $0.14
The latest report included earnings for the first time in recent memory.. I think that AMEH is now at a critical mass where increased sales will come to bottom line with more ease.. AMEH sol at levels twice these just last year on far fewer sales and W/O any profits.. hank
AMEH,, $0.11 Earnings PR..
Apollo Medical Holdings, Inc. Reports Record Revenue in Third Quarter of 2011
GLENDALE, Calif., Dec. 22, 2011 /PRNewswire via COMTEX/ -- Apollo Medical
Holdings, Inc. ("ApolloMed") (OTC-AMEH.OB), a leading provider of hospitalist and
multi-disciplinary care management services to the healthcare community, today
announced its third quarter and YTD operating results:
During the third quarter ended October 31, 2011, ApolloMed recorded record
revenues of $1,431,965 compared to $1,019,078 in revenue during the third quarter
ended October 31, 2010. For the nine month period ended October 31, 2011,
ApolloMed recorded revenue of $3,565,366, a 24.6% increase over the same period
in 2010.
ApolloMed recorded net income for the quarter ended October 31, 2011 of $58,204
compared to a net loss of $41,015 during the third quarter ended October 31,
2010.
Over the past nine months, the company has realized the following:
ApolloMed was selected to provide hospitalist services at two new hospitals:
Tulare Regional Medical Center and Glendale Memorial Hospital.
Announced its first health plan contract to provide comprehensive physician
services and inpatient care for members enrolled in Anthem's Medi-Cal program in
Los Angeles County.
Announced the acquisition of Primary Critical Care Management and Aligned
Healthcare.
"We are pleased with the results of our third quarter," stated Warren Hosseinion,
M.D., Chief Executive Officer of Apollo Medical Holdings, Inc. "We remain focused
on our objective of attaining profitable operations and on increasing shareholder
value. And we continue to make significant progress in expanding both our service
offering and geographic footprint."
About Apollo Medical Holdings, Inc.
ApolloMed is a leading provider of integrated medical management services that
improves the efficiency in inpatient care plus multi-disciplinary care management
services targeting inefficiencies in healthcare payer and provider networks. Our
integrated model combines hospitalist medicine, critical care medicine, 24-hour
physician call centers, case management and transition management that offers to
help healthcare organizations engage in performance payments for utilization
efficiency, quality of care objectives and shared accountability arrangements.
The company intends to capitalize on the growing market for hospital-based
physicians and care management services. There are 4900 acute care hospitals in
the U.S., with over 35 million annual admissions. Total U.S. spending on hospital
care is over $650 billion, and is expected to increase to $1.3 trillion by 2016.
There are tremendous inefficiencies in the delivery of inpatient care, a high
rate of hospital errors and high readmission rates. These are drivers for the
growth of hospital-based medicine and care management services. Apollo and its
affiliated medical groups have proven expertise in providing excellent and
efficient care to hospitalized patients.
SOURCE Apollo Medical Holdings, Inc.
Copyright (C) 2011 PR Newswire. All rights reserved
AMEH.. $0.06 Finnaly we have earnings.. hank
Three Months Ended October 31, 2011 vs. Three Months Ended October 31, 2010...
From 8K filed on 12/14/2011:
"....Adrian Vazquez, M.D., resigned his positions as Chairman of the Board, President and a director of Apollo Medical Holdings, Inc...."
I got a bad,bad,bad feeling that the coming ER is BAD,BAD,and BAD;realization that the business model is flawed ever since the beginning,is not helping the management;and a likely share dilution as the next option,if not the only option,to save the balance sheet at current shareholders expense,again!
ER is out........top-line $1.1 million,cost 86%,SG&A 22%,......top-line growth 5% Q/Q......The current business model is flawed!! This stock is worth at 2009 price,$0.07 cents that is!!!
AMEH.. $0.18
ApolloMed Hospitalists Selected to Provide Hospitalist Services to Tulare Regional Medical Center
Today : Friday 9 September 2011
Apollo Medical Holdings, Inc. (OTC-BB: AMEH), a leading provider of hospitalist, critical care, call center and care management services to the healthcare community, today announced that ApolloMed Hospitalists, one of its affiliated medical groups, signed a service agreement with Tulare Regional Medical Center to provide comprehensive inpatient care services at the 112-bed facility in Tulare, California.
"We are very excited to have been selected as the hospitalist group at Tulare Regional. We look forward to working with the medical staff and management to enhance patient care and efficiencies," stated Warren Hosseinion, M.D., Chief Executive Officer of Apollo Medical Holdings.
"Tulare Regional Medical Center welcomes ApolloMed Hospitalists to our team of healthcare providers, realizing that our patients will benefit from their delivery of quality care," stated Shawn Bolouki, Chief Executive Officer of Tulare Regional Medical Center.
"We look forward to growing with Tulare Regional as it nears completion of its new $120 million budgeted medical tower in 2012, which will be equipped with additional bed capacity, a roof-top helipad, robotic surgery capabilities, 24-bay emergency department and trauma capabilities," stated Adrian Vazquez, M.D., President and Chairman of Apollo Medical Holdings, Inc.
About Apollo Medical Holdings, Inc.
Apollo is a leading provider of hospitalist, critical care, call center and multi-disciplinary care management services to the healthcare community in California. The company intends to capitalize on the growing market for hospitalists, critical care specialists and care management services. There are 4900 acute care hospitals in the U.S., with over 35 million annual admissions. Total U.S. spending on hospital care is over $650 billion, and is expected to increase to $1.3 trillion by 2016. There are tremendous inefficiencies in the delivery of inpatient care and a high rate of hospital errors. Both of these are drivers for the growth of hospital-based medicine. Apollo and its affiliated medical groups have proven expertise in providing excellent and efficient care to hospitalized patients.
SOURCE Apollo Medical Holdings, Inc.
AMEH.. $0.1988 Apollo Medical Holdings, Inc. Announces Acquisition of Pulmonary Critical Care Management, Inc. and Formation of Pulmonary Critical Care Division
PR Newswire - Aug 02 09:00 EDT
Alert hits:all pos
Company Symbols: OTC-PINK:AMEH, ACORN:A.1357173357
GLENDALE, Calif., Aug. 2, 2011 /PRNewswire/ -- Apollo Medical Holdings, Inc. ("Apollo") (OTC-BB: AMEH), a leading provider of hospitalist and multi-disciplinary care management services to the healthcare community, today announced that it has acquired Pulmonary Critical Care Management, Inc. ("PCCM"), a provider of management services to the Los Angeles Lung Center, as well as the formation of its new Division of Pulmonary and Critical Care Medicine. In exchange for a 100% ownership interest in PCCM, Apollo will issue 350,000 common shares to the shareholders of PCCM.
Dr. Babak Abrishami, President of Pulmonary Critical Care Management, Inc. and President of the Los Angeles Lung Center, was named Head of the Division of Pulmonary and Critical Care Medicine. Dr. Abrishami founded the Los Angeles Lung Center in 2004 and has steadily grown the practice. In addition to a busy pulmonary practice, Dr. Abrishami and his group provide pulmonary and critical care services at Good Samaritan Hospital, St. Vincent's Hospital, Hollywood Presbyterian Medical Center and Cedars-Sinai Hospital. Dr. Abrishami completed both a residency in internal medicine and a fellowship in pulmonary and critical care medicine at the University of Southern California. He is Board Certified in Internal Medicine and in Pulmonary and Critical Care Medicine.
"We are pleased to welcome Babak and his group to the Apollo team and excited about our new pulmonary and critical care division," stated Warren Hosseinion, M.D., Chief Executive Officer of Apollo Medical Holdings, Inc. "It is our firm belief that hospitals will increasingly adopt a closed ICU model, in which patients will be co-managed by dedicated critical care specialists and hospitalists. We intend to market this new service to all our existing and new hospital partners."
Critical care services account for a large and growing proportion of inpatient services in the United States. Although intensive care units represent only 5-10% of all hospital beds, they may consume up to 34% of hospital budgets. According to one study, this figure extrapolates to over 1% of the gross domestic product. Given the increasingly high cost of health care delivery, more attention is being devoted to minimizing costs while maintaining or increasing the quality of care in ICUs. Most hospitals in the United States use the open model of ICU, in which patients are admitted and cared for by their primary care physicians. Multiple studies have demonstrated increased efficiency and better outcomes in the closed ICU model, including shorter ICU Length of Stay (LOS), shorter hospital LOS, decreased number of days on mechanical ventilation, reduction in ICU costs, increased compliance with core measures and a reduction in mortality rate. In nine studies, relative reductions in mortality rates in the closed ICU model ranged from 15% to 60%. Based on the conservative 15% rate, full implementation of closed ICUs would save 53,850 lives each year in the United States.
"It is a pleasure to join forces with the management team of Apollo," stated Dr. Abrishami. "I look forward to growing the Division of Pulmonary and Critical Care Medicine and turning the company into a leader in critical care services."
"The Apollo integrated model now includes acute care services, including hospitalist and pulmonary/critical care solutions, as well as post-acute care services, including case management, disease management and 24/7 physician call center solutions. This combination of services is truly unique," stated Adrian Vazquez, M.D., President and Chairman of Apollo Medical Holdings, Inc.
About Apollo Medical Holdings, Inc.
Apollo is a leading provider of integrated medical management services that improves the efficiency in inpatient care plus multi-disciplinary care management services targeting inefficiencies in healthcare payer and provider networks. Our integrated model combines hospitalist medicine, critical care medicine, 24-hour physician call centers, case management and transition management that offers to help healthcare organizations engage in performance payments for utilization efficiency, quality of care objectives and shared accountability arrangements. The company intends to capitalize on the growing market for hospital-based physicians and care management services. There are 4900 acute care hospitals in the U.S., with over 35 million annual admissions. Total U.S. spending on hospital care is over $650 billion, and is expected to increase to $1.3 trillion by 2016. There are tremendous inefficiencies in the delivery of inpatient care, a high rate of hospital errors and high readmission rates. These are drivers for the growth of hospital-based medicine and care management services. Apollo and its affiliated medical groups have proven expertise in providing excellent and efficient care to hospitalized patients.
SOURCE Apollo Medical Holdings, Inc.
AMEH..$0.19..
Aktien Medical Ventures, LLP Takes 4.9% Position in Apollo Medical Holdings, Inc.
DALLAS, July 21, 2011 /PRNewswire/ -- Aktien, Inc., an investor in micro-cap equity securities for healthcare, energy and technology companies, today announced that it has acquired, through an affiliated partnership, Aktien Medical Ventures, LLP, 4.9% (1,418,500 shares) of the outstanding Common Stock of Apollo Medical Holdings, Inc. (OTC-BB: AMEH), a leading provider of integrated medical management services that improves the efficiency in inpatient care plus multi-disciplinary care management services targeting inefficiencies in healthcare payer and provider networks.
"Over the last ten years, ApolloMed has assembled a healthcare delivery system that improves the quality of care of hospitalized patients while reducing the costs for healthcare payers," stated Ronald F. Beck, Founder, President and Chief Executive Officer of Aktien, Inc. "The company's approach, from initial health risk assessment, efficient inpatient treatment plan, comprehensive discharge planning, and 24/7 physician call centers for post-discharge care, gives patients comprehensive and integrated care that reduces medical errors, hospital length of stay, cost per admission and readmission rates. ApolloMed's unique approach is the answer to many of the problems facing the U.S. healthcare system."
"Aktien has been one of the most successful investors in healthcare for more than 20 years. We welcome Ron's expertise in helping ApolloMed achieve its goals," stated Warren Hosseinion, M.D., Chief Executive Officer of Apollo Medical Holdings, Inc.
About Apollo Medical Holdings, Inc.
Apollo is a leading provider of integrated medical management services that improves the efficiency in inpatient care plus multi-disciplinary care management services targeting inefficiencies in healthcare payer and provider networks. Our integrated model combines hospitalist medicine, 24-hour physician call centers, case management and transition management that offers to help healthcare organizations engage in performance payments for utilization efficiency, quality of care objectives and shared accountability arrangements. The company intends to capitalize on the growing market for hospital-based physicians and care management services. There are 4900 acute care hospitals in the U.S., with over 35 million annual admissions. Total U.S. spending on hospital care is over $650 billion, and is expected to increase to $1.3 trillion by 2016. There are tremendous inefficiencies in the delivery of inpatient care, a high rate of hospital errors and high readmission rates. These are drivers for the growth of hospital-based medicine and care management services. Apollo and its affiliated medical groups have proven expertise in providing excellent and efficient care to hospitalized patients.
About Aktien, Inc.
Aktien, Inc. and its predecessor since 1989 have provided, through affiliated partnerships, venture capital and invested in microcap equity securities for healthcare, energy and technology companies. Aktien is based in Dallas, Texas and has offices in Los Angeles and Buenos Aires and invests in companies in the U. S., Canada and South America.
SOURCE Apollo Medical Holdings, Inc.
AMEH.. $0.1988..
ApolloMed Hospitalists Selected by CareMore Health Plan to Provide Hospitalist Services to Its Members at Three Los Angeles Hospitals.........
GLENDALE, Calif., July 1, 2011 /PRNewswire/ -- Apollo Medical Holdings, Inc. (OTC-BB: AMEH), a leading provider of hospitalist and care management services to the healthcare community, today announced that ApolloMed Hospitalists, one of its affiliated medical groups, signed a service agreement with CareMore Health Plan to provide inpatient care services to its members at White Memorial Hospital, Glendale Memorial Hospital and Glendale Adventist Medical Center. Cerritos, Ca.-based CareMore is primarily a senior-benefits health plan with 54,000 members in California, Arizona and Nevada, and recently entered into an agreement to be acquired by WellPoint, Inc. for $800 million.
"CareMore is an exceptional health plan with an outstanding reputation for patient care. We look forward to working with their management and care teams to improve patient care and efficiencies at these three hospitals," stated Warren Hosseinion, M.D., Chief Executive Officer of Apollo Medical Holdings.
About Apollo Medical Holdings, Inc.
Apollo is a leading provider of hospitalist and multi-disciplinary care management services to the healthcare community in the Greater Los Angeles area. The company intends to capitalize on the growing market for hospital-based physicians, such as hospitalists, or physicians with expertise in hospital medicine. There are 4900 acute care hospitals in the U.S., with over 35 million annual admissions. Total U.S. spending on hospital care is over $650 billion, and is expected to increase to $1.3 trillion by 2016. There are tremendous inefficiencies in the delivery of inpatient care and a high rate of hospital errors. Both of these are drivers for the growth of hospital-based medicine. Apollo and its affiliated medical groups have proven expertise in providing excellent and efficient care to hospitalized patients.
SOURCE Apollo Medical Holdings, Inc.
ApolloMed Hospitalists Selected by CareMore Health Plan to Provide Hospitalist Services to Its Members at Three Los Angeles Hospitals
| 8:00 AM | By PR Newswire Association LLC. |
GLENDALE, Calif., July 1, 2011 /PRNewswire/ -- Apollo Medical Holdings, Inc. (OTC-BB: AMEH), a leading provider of hospitalist and care management services to the healthcare community, today announced that ApolloMed Hospitalists, one of its affiliated medical groups, signed a service agreement with
Related News: Similar Content, By PR Newswire Association LLC., New Products & Services http://www.prnewswire.com/news-releases/apollomed-hospitalists-selected-by-caremore-health-plan-to-provide-hospitalist-services-to-its-members-at-three-los-angeles-hospitals-124846894.html#rssowlmlink
AMEH.. $0.2288 earnings..
Revenue Recognition
The Company provides hospitalist services to numerous hospitals and other health care providers and recognizes revenue as the services are provided. The Company generates, and segregates, its revenue into three categories: Case Rate, Capitation and Fee for Service. Case Rate and Capitation revenues in each period are recorded upon completion of the services under each contract.
Patient Fee for Service revenues in each period is recorded at amounts reasonably assured to be collected. The percentage of Fee for Service billings that are assumed reasonably collectible are based on experience and are adjusted to reflect actual collections in subsequent periods.
The estimation and the reporting of patient responsibility revenues is highly subjective and depends on the payer mix, contractual reimbursement rates, collection experiences, and other factors.
Direct Costs of Services
Direct Costs include the direct salaries and contract payments to physicians employed by the Company that serve as hospitalists, all employment related taxes, medical and disability insurance costs, premiums for malpractice insurance provided to these physicians, and costs associated with establishing physician privileges.
Management Fees
AMH is charged, and pays, a monthly management fee to AMM. The fee is calculated on a percentage of AMH’s gross revenue that AMH receives for the performance of medical services by AMH. The monthly percentage is established based upon the requirements of AMM. The Management Services Agreement was modified on March 20, 2009 to allow for an adjustment in monthly management fees as needed to cover costs incurred by AMM. These fees are eliminated in consolidation.
FISCAL YEAR ENDED JANUARY 31, 2011 COMPARED TO FISCAL YEAR ENDED JANUARY 31, 2010
Net revenue was $3,896,584 for the twelve months ended January 2011, compared to revenues of $2,441,452 for the comparable twelve months ended January 2010. The Company increased the number of hospitals and independent physician associations contracts to 31 at the end of January 2011.
Physician practice salaries, benefits and other expenses totaled $3,314,722 for the twelve months ended January 2011, compared to $1,813,994 for the corresponding twelve months ended January 2010. Cost of Services were 85% of net revenues for the twelve months ended January 2011, up from 74% of revenues for the comparable twelve month period ended January 2010. Cost of Services includes the payroll and consulting costs of the physicians, all payroll related costs, costs for all medical malpractice insurance and physician privileges. The increase in cost of services is due to start-up losses associated with new contracts, higher stock compensation expense incurred due to stock option grants during the fourth quarter of 2011 and lower bad debt expense. The reduction in bad debt is a result of improved collections efforts to identify and track payments due to the company for physician services.
General and administrative expenses decreased $127,670, or 18%, to $566,649 or 15% of net revenue, for the twelve months ended January 2011, as compared to of $694,319, at 28% of net revenue, for the twelve months ended January 2010. The decrease in General and Administrative costs was due to absence of transaction expenses related to the 10% Senior Subordinated Callable Convertible Notes 2010 and reduction is certain other expenses. This reduction in expenses was partially offset by expenses and costs related to the continuing growth of our operations. In addition, the Company recorded stock compensation expense of $11,810 for the twelve months ended January 2011 compared with $0 in the year ended January 2010.
Depreciation and amortization expense was $11,198 and $35,704 for the twelve months ended January 31, 2011 and 2010, respectively.
The Company reported a profit from Operations of $4,015 for the twelve months ended January 31, 2011, compared to a Loss from Operations of $102,515 in the fiscal year ended January 31, 2010. The decrease in the Loss from Operations was due to the increased contribution from the growth in revenues, coupled with the decrease in General and Administrative expenses,
Interest expense and financing costs were $163,931 for the twelve months ended January 31, 2011, compared to interest and financing expenses of $93,066 for the twelve months ended January 31, 2010. Interest expense in 2011 included $125,000 of interest expense related to our 10% Senior Subordinated Callable Convertible Notes. Financing fees included the amortization of pre-paid commissions of $37,500 that were paid to the placement agent.
The Company reported a net loss of $156,331 for the twelve months ended January 31, 2011, favorable by $39,750 to the net loss of $196,080 reported for the twelve months ended January 31, 2010. The reduction in net loss was primarily due to the higher revenues and the decrease in General and Administrative costs in 2011 from 2010.
Liquidity and Capital Resources
At January 31, 2011, the Company had cash and cash equivalents of $397,101, compared to cash and cash equivalents of $665,737 at the beginning of the fiscal year at January 31, 2010. The cash balance at January 31, 2011 included $389,198 in a money market brokerage account. Long-term borrowings totaled $1,248,588 as of January 31, 2011, compared to long-term borrowings of $1,247,582 on January 31, 2010.
Net cash used in operating activities totaled $245,031in the twelve months ended January 31, 2011, compared to net cash used in operations of $338,141 in the comparable twelve months ended January 31, 2010. The reduction in net cash used in operating activities was primarily due to the higher revenues and the decrease in General and Administrative costs in 2011 from 2010.
Net cash used in operating activities for the twelve months of 2011 of $245,031 was comprised of a net loss of $156,331 for the twelve month period. Adjustments for non-cash charges which include depreciation, bad debt expense, the value of shares issued for services, option expense, and the amortization of warrant discount, totaled $18,310. In addition, net changes in operating assets and liabilities, primarily an increase in outstanding receivables, used cash of $290,363.
Net cash used for investing activities totaled $21,165 in the twelve months ended January 31, 2011, compared to net cash used in operations of $0 in the comparable twelvemonths ended January 31, 2010. The increase in net cash used in operating activities was primarily due to cash associated with improvements to ApolloWeb and purchase of new computers and office equipment.
For the twelve months ended January 31, 2011, net cash used in financing activities totaled $2,440, compared to $919,717 provided by financing activities for the same period in 2010. The Company did not complete any financing transactions during the twelve months ended January 31, 2011. During fiscal 2010, the Company completed the private placement with Syndicated Capital which provided proceeds of $1,250,000. Concurrent with the receipt of these proceeds, the Company retired the business loan with Wells Fargo Bank of $ 198,000 on October 27, 2009, and the related party convertible note in the amount of $75,000 on October 22, 2009. Three convertible notes, two of which were payable to related parties aggregating to $33,000, were fully paid off in late December 2009.
The Company had no off-balance sheet arrangements during the period ended January 31, 2011.
APOLLO MEDICAL HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
FOR THE YEARS ENDED JANUARY 31, 2011 AND 2010
January 31,
2011 2010
CURRENT ASSETS
Cash and cash equivalents $ 397,101 $ 665,737
Accounts receivable, net 704,971 457,517
Receivable from officers 24,873 23,483
Due from affiliate 3,900 2,850
Prepaid expenses 29,138 30,165
Prepaid financing cost, current 37,500 37,500
Total current assets 1,197,483 1,217,251
Prepaid financing cost, long term 39,500 76,563
Property and equipment – net 21,593 11,627
TOTAL ASSETS $ 1,258,139 $ 1,305,441
LIABILITIES AND STOCKHOLDERS' DEFICIT:
CURRENT LIABILITIES:
Accounts payable and accrued liabilities $ 92,745 $ 104,252
Total current liabilities 92,745 104,252
Convertible notes 1,248,588 1,247,582
Total liabilities 1,341,333 1,351,834
STOCKHOLDERS' DEFICIT:
Preferred stock, par value $0.001 ; 5,000,000 shares authorized; none issued - -
Common Stock, par value $0.001; 100,000,000 shares authorized, 27,635,774 and 27,041,328 shares issued and outstanding as on January 31, 2011 and 2010, respectively 27,636 27,041
Additional paid-in-capital 1,058,418 939,483
Accumulated deficit (1,397,363 ) (1,241,031 )
Total (311,309 ) (274,507 )
Non-controlling interest 228,115 228,115
Total stockholders' deficit (83,194 ) (46,393 )
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 1,258,139 $ 1,305,441
The accompanying notes are an integral part of these consolidated financial statements
APOLLO MEDICAL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED JANUARY 31, 2011 AND 2010
For the years ended
January 31,
2011 2010
REVENUES $ 3,896,584 $ 2,441,452
COST OF SERVICES 3,314,722 1,813,944
GROSS REVENUE 581,862 627,508
Operating expenses:
General and administrative 566,649 694,319
Depreciation 11,198 35,704
Total operating expenses 577,847 730,023
INCOME (LOSS) FROM OPERATIONS 4,015 (102,515 )
OTHER EXPENSES:
Interest expense (126,431 ) (53,128 )
Financing cost (37,500 ) (39,938 )
Other income 5,185 300
Total other expenses 158,746 92,766
LOSS BEFORE INCOME TAXES (154,731 ) (195,280 )
Provision for income tax 1,600 800
NET LOSS $ (156,331 ) $ (196,280 )
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING, BASIC AND DILUTED 27,490,476 26,491,052
*BASIC AND DILUTED NET LOSS PER SHARE $ (0.00 ) $ (0.01 )
*Weighted average number of shares used to compute basic and diluted loss per share is the same since the effect of dilutive securities is anti-dilutive.
The accompanying notes are an integral part of these consolidated financial statements
APOLLO MEDICAL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' DEFICIT
FOR THE YEARS ENDED JANUARY 31, 2011 AND 2010
Common Stock Non-
controlling Accumulated Stockholder's
Shares Amount APIC Interest Deficit Deficit
Balance at January 31, 2009 25,870,220 $ 25,870 $ 550,058 $ 228,115 $ (1,044,951 ) $ (240,909 )
Shares issued for service 804,443 804 183,139 - - 183,943
Shares issued for financing cost 100,000 100 3,900 - - 4,000
Shares issued for convertible notes payable 266,665 267 199,733 - - 200,000
Unamortized warrant discount - - 2,653 - - 2,653
Net Loss - - - - (196,080 ) (196,080 )
Balance at January 31, 2010 27,041,328 27,041 939,483 228,115 (1,241,031 ) (46,393 )
Shares issued for service 594,446 595 46,783 - - 47,378
Non-cash stock-based compensation charges - - 72,152 - - 72,152
Net Loss - - - - (156,331 ) (156,331 )
Balance at January 31, 2011 27,635,794 $ 27,636 $ 1,058,418 $ 228,115 $ (1,397,362 ) $ (83,194 )
The accompanying notes are an integral part of these consolidated financial statements
APOLLO MEDICAL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED JANUARY 31, 2011 AND 2010
Years ended January 31,
2011 2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $ (156,331 ) $ (196,080 )
Adjustments to reconcile net loss to net cash (used in) operating activities:
Depreciation 11,198 35,703
Bad debt expense 42,908 114,358
Issuance of shares for services 47,378 183,944
Shares issued as finance charge - 4,000
Stock option expense 72,152 -
Amortization of debt discount 1,006 235
Changes in assets and liabilities:
Accounts receivable (290,363 ) (316,208 )
Prepaid financing cost 37,500 (114,063 )
Prepaid expenses 1,027 (5,140 )
Accounts payable and accrued liabilities (11,507 ) (44,889
Net cash used in operating activities (245,031 ) (338,141 )
CASH FLOWS FROM INVESTING ACTIVITIES:
Cash paid for purchase of property and equipment (21,165 ) -
CASH FLOWS FROM FINANCING ACTIVITIES:
Payments of line of credit - (198,000 )
Due from related parties (2,440 ) (24,283 )
Proceeds from/(payment to) related parties - (98,000 )
Proceeds from/(payment to) convertible notes - 1,240,000
Net cash (used) provided by financing activities (2,440 ) 919,717
NET (DECREASE) INCREASE IN CASH & CASH EQUIVALENTS (268,636 ) 581,576
CASH & CASH EQUIVALENTS, BEGINNING BALANCE 665,737 84,161
CASH & CASH EQUIVALENTS, ENDING BALANCE $ 397,101 $ 665,737
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION
Interest paid during the year $ 125,425 $ 53,128
Taxes paid during the year $ 1,600 $ 1,600
NON-CASH SUPPLEMENTAL DISCLOSURE
Conversion of convertible notes payable to equity $ - $ 200,000
Convertible note payable due and classified in accrued liabilities $ - $ 200,000
AMEH.. $0.2588 New High
ApolloMed Hospitalists Selected to Provide Hospitalist Services to Glendale Memorial Hospital
PR Newswire - Mar 31 at 09:00
Company Symbols: OTC-PINK:AMEH
GLENDALE, Calif., March 31, 2011 /PRNewswire/ -- Apollo Medical Holdings, Inc. (OTC-BB: AMEH), a leading provider of hospitalist and care management services to the healthcare community, today announced that ApolloMed Hospitalists, one of its affiliated medical groups, signed a service agreement with Glendale Memorial Hospital, a CHW facility, to provide comprehensive inpatient care services at the 334-bed facility in Glendale, California. Under the agreement, ApolloMed will provide hospitalist services for inpatient physician coverage and coordination of care for unassigned and uninsured patients at the hospital. ApolloMed currently provides 24-hour coverage at Glendale Memorial Hospital to over 20 IPAs and healthplans.
&;Glendale Memorial is an exceptional facility and we look forward to working with the medical staff and management to improve patient care and efficiencies. Inpatient medicine requires different skill sets from treating patients outside the hospital. All of our physicians are board certified in internal medicine and have years of experience treating hospitalized patients,&; stated Warren Hosseinion, M.D., Chief Executive Officer of Apollo Medical Holdings.
&;Glendale Memorial Hospital and Health Center is pleased to have the support of ApolloMed as our new hospitalist group that will provide coverage for our emergency department patient admissions. They have a great depth of experience and are highly respected by our medical staff,&; stated Mark Meyers, President of Glendale Memorial Hospital and Health Center.
&;ApolloMed Hospitalists was started at Glendale Memorial Hospital in 2001 and the hospital has been a great supporter of ApolloMed and our physicians since the beginning. We look forward to a closer working relationship between the two groups,&; stated Adrian Vazquez, M.D., President and Chairman of Apollo Medical Holdings, Inc.
About Apollo Medical Holdings, Inc.
Apollo is a leading provider of hospitalist services to the healthcare community in the Greater Los Angeles area. The company intends to capitalize on the growing market for hospital-based physicians, such as hospitalists, or physicians with expertise in hospital medicine. There are 4900 acute care hospitals in the U.S., with over 35 million annual admissions. Total U.S. spending on hospital care is over $650 billion, and is expected to increase to $1.3 trillion by 2016. There are tremendous inefficiencies in the delivery of inpatient care and a high rate of hospital errors. Both of these are drivers for the growth of hospital-based medicine. Apollo and its affiliated medical groups have proven expertise in providing excellent and efficient care to hospitalized patients.
SOURCE Apollo Medical Holdings, Inc.
AMEH.. $0.23..
It could be that we will have earnings for the first time this report.. hank
AMEH.. $0.1828 Big News..
Anthem Blue Cross, ApolloMed Team to Provide Hospitalist Services for Medi-Cal Members
PR Newswire - Mar 15 at 12:00
Company Symbols: OTC-PINK:AMEH
WOODLAND HILLS, Calif., March 15, 2011 /PRNewswire/ -- Anthem Blue Cross and ApolloMed announced today a new agreement to provide comprehensive physician services and inpatient care for members enrolled in Anthem's Medi-Cal program in Los Angeles County. The program will serve adult Medi-Cal members including individuals enrolled in the state's Seniors and People with Disabilities (SPD) program who select Anthem as their health plan, when the state's SPD program transitions into managed care in June 2011.
The cornerstone of Anthem's state sponsored programs is founded on providing members with a coordinated approach to their health care. That's why when members need hospitalization, it's important to ensure that they have continued access to quality care. With a presence at 24 acute care hospitals in the Greater Los Angeles area, ApolloMed will enhance the health outcomes of Anthem's Medi-Cal members through the effective management of their inpatient care and help reduce costs associated with hospitalization. In fact, studies show that hospitalists can help reduce the length of stay by more than 30 percent and reduce hospital costs by up to 20 percent.
"We are proud to have been selected by Anthem Blue Cross as their hospitalist partner. ApolloMed is uniquely suited to partner with Anthem to manage their members' care during hospitalization with the goal of lower admission rates and length of stay as well as enhancing the quality of care," said Warren Hosseinion, M.D., chief executive officer of Apollo Medical Holdings, Inc.
According to Anthem, members will be seen by a physician multiple times throughout the day, thus helping to improve the efficiency and quality of their hospital stay. In addition, this will provide physicians the opportunity to review members' progress and plan for a timely discharge with a transition plan that includes appropriate outpatient follow-up care and support services aimed at preventing a re-admission to the hospital.
"Anthem understands that a hospitalization can be a worrisome experience for our members; we want to ensure that any time our members require hospitalization they have access to comprehensive health care and feel confident that they will have a successful discharge and a recovery," said Kevin Hayden, president of Anthem's State Sponsored Business. "Our agreement with ApolloMed will enhance the quality of care our members receive during their hospitalization to help improve health outcomes," added Hayden.
Anthem's addition of the hospitalist agreement further complements existing programs available to Anthem's Medi-Cal members such as the DailyMed Pharmacy Program, 24-hour physician on-call program and the 24-hour care management and case management program.
"ApolloMed and our physicians are excited about the opportunity to partner with Anthem to improve the quality of care for their hospitalized Medi-Cal members. All of ApolloMed's physicians are board certified in internal medicine and excel at reducing avoidable inpatient utilization and coordinating effective discharge planning," stated Adrian Vazquez, M.D., president, and chairman of Apollo Medical Holdings, Inc. "ApolloMed's goal is to manage members' hospitalizations and collaboratively plan for an effective transition to an outpatient setting. ApolloMed believes that integrating and coordinating care across settings and between hospitalists and ambulatory care providers is the critical factor in achieving the balance between optimal length of stay and avoidable re-admissions," explained Vazquez.
ApolloMed anticipates adding new hospitals to their list of the existing facilities they serve to support Anthem's membership. They also plan to add additional post-discharge outpatient clinics to ensure that members have access to timely physician follow-up care until their medical provider is available to resume the management of their care following discharge.
About Anthem Blue Cross:
Anthem Blue Cross is the trade name of Blue Cross of California. Anthem Blue Cross Partnership Plan is the trade name of Blue Cross of California Partnership Plan. Anthem Blue Cross and Anthem Blue Cross Partnership Plan are independent licensees of the Blue Cross Association. ® ANTHEM is a registered trademark of Anthem Insurance Companies, Inc. The Blue Cross names and symbols are registered marks of the Blue Cross Association. Additional information about Anthem Blue Cross is available at www.anthem.com/ca. Also, follow us on Twitter at www.twitter.com/healthjoinin, on Facebook at www.facebook.com/HealthJoinIn, , or visit our YouTube channel at www.youtube.com/healthjoinin
About Apollo Medical Holdings, Inc.
Apollo is a leading provider of integrated medical management services that improves the efficiency in inpatient care plus multi-disciplinary care management services targeting inefficiencies in healthcare payer and provider networks. Our integrated model combines hospitalist medicine, 24-hour physician call centers, case management and transition management that offers to help healthcare organizations engage in performance payments for utilization efficiency, quality of care objectives and shared accountability arrangements. The company intends to capitalize on the growing market for hospital-based physicians and care management services. There are 4900 acute care hospitals in the U.S., with over 35 million annual admissions. Total U.S. spending on hospital care is over $650 billion, and is expected to increase to $1.3 trillion by 2016. There are tremendous inefficiencies in the delivery of inpatient care, a high rate of hospital errors and high readmission rates. These are drivers for the growth of hospital-based medicine and care management services. Apollo and its affiliated medical groups have proven expertise in providing excellent and efficient care to hospitalized patients. www.apollomed.net.
SOURCE Anthem Blue Cross
AMEH.. $0.24
STOCK PURCHASE AGREEMENT
This STOCK PURCHASE AGREEMENT (the “Agreement”) is made and entered into as of February 15, 2011, by and among Apollo Medical Holdings, Inc., a Delaware corporation (the “Buyer”), on the one hand, and Aligned Healthcare Group LLC, a California limited liability company (“Aligned LLC”), Aligned Healthcare Group – California, Inc., a California professional medical corporation (“Aligned Corp.”), Raouf Khalil (“Khalil”), Jamie McReynolds, M.D. (“McReynolds”), BJ Reese & Associates, LLC (“Reese LLC”) and BJ Reese (“Reese”). Aligned Corp., Khalil, McReynolds, Reese LLC and Reese are sometimes referred to herein collectively as the “Sellers” and individually as a “Seller.” Aligned LLC and the Sellers are sometimes collectively referred to herein as the “Aligned Parties” and individually as an “Aligned Party”.
A. Aligned Corp. conducts a medical practice in the Counties of Tulare, Kings, Madera, Sacramento, Stanislaus and Fresno in California (the “Aligned Territory”). Aligned Corp. has also developed certain expertise and know-how in connection with the management, administration and operation of its medical practice and related services.
B. Aligned LLC provides management services to Aligned Corp. and other medical practices in the Aligned Territory, which include managing and administering Aligned Corp.’s and other providers’ medical clinics and providing support services to and furnishing Aligned Corp. and other practices with the necessary personnel and support staff.
C. Aligned Corp. and Aligned LLC have sold and transferred or will sell and transfer prior to the Closing (as defined below) to Aligned Healthcare, Inc., a California corporation (the “Company”), for fair value, certain assets (the “Asset Sale”) used or useful in the management, administration and operation of 24-hour physician and nursing call centers described on Schedule 2.5 (the “Assets”).
D. Khalil, McReynolds and Reese are officers, directors, employees, consultants and affiliates of Aligned LLC and Aligned Corp., and Aligned Corp., Khalil, McReynolds and Reese LLC own all of the issued and outstanding shares of capital stock in the Company (the “Shares”).
E. The Buyer desires to acquire from the Sellers, and the Sellers desire to sell to the Buyer, all of the Shares (the “Sale of Shares”).
F. In connection with the Sale of Shares, each of Khalil, McReynolds and Reese shall enter into a consulting agreement with the Company, pursuant to which each such person shall provide consulting services to the Company following the Closing and be entitled to receive cash compensation therefor (the “Consulting Arrangements”).
G. As additional consideration for the Sale of Shares and as a further inducement for the Buyer to enter into the Sale of Shares and the Consulting Arrangements, Aligned LLC and its members shall enter into an agreement at Closing granting the Buyer a right of first refusal with respect to the membership interests and assets of Aligned LLC (the “ROFR”).
H. The Asset Sale, the Sale of Shares, the Consulting Arrangements, the ROFR and each of the other transactions contemplated under this Agreement or any of the Transaction Documents (as defined below) are sometimes collectively referred to herein as the “Transactions”.
NOW, THEREFORE, in consideration of the premises and of the mutual agreements, representations, warranties, provisions and covenants herein contained, the parties hereto, each intending to be bound hereby, agree as follows:
ARTICLE 1
PURCHASE AND SALE OF THE SHARES
1.1 Purchase of Shares. At the Closing (as defined in Section 1.4), subject to the terms and conditions of this Agreement, the Sellers shall sell and deliver to the Buyer, and the Buyer shall purchase from the Sellers, all of the Shares in exchange for the delivery by the Buyer to the Sellers, at the Closing, of the purchase price described in Section 1.2 (the “Purchase Price”).
1.2 Consideration.
(a) Purchase Price. Subject to Sections 1.2(d) and 9.4, the Purchase Price is (i) 1,000,000 shares (the “Initial Shares”) of the Buyer’s common stock, par value $0.001 (the “Buyer Stock”), plus (ii) 1,000,000 shares of Buyer Stock issuable, if at all, solely as set forth in Section 1.2(b) (the “Contingent Stock”), plus (iii) any post-Closing issuance of Buyer Stock referred to in Section 1.2(c) (the “Post-Closing Earnout Stock”), which Post-Closing Earnout Stock shall be issuable, if at all, solely as set forth in Section 1.2(c). The Buyer Stock shall be issued under this Section 1.2 to the Sellers in the respective percentages set forth on Schedule 2.2. The Buyer shall have no obligation to register or qualify for resale under the Securities Act of 1933, as amended (the “1933 Act”), or any state securities law, the shares of Buyer Stock issued to the Sellers pursuant to this Agreement.
(b) Contingent Stock. If, and only if, the Company and a physicians’ group to be formed following the Closing and owned by affiliates of the Buyer, taken together (the “Aligned Division”), meet the revenue target described on Schedule 1.2(b), the Buyer shall issue the Contingent Stock to the Sellers. If such revenue target has not been met by February 1, 2012, then the Sellers’ right to receive the Contingent Stock shall terminate.
(c) Post-Closing Earnout Stock.
(i) The following capitalized terms used in this Agreement shall have the following meanings:
(1) “Actual EBITDA Amount” means the actual EBITDA during each of the First 12-Month Earnout Period during that particular period, the Second 12-Month Earnout Period during that particular period and the Third and Final 12-Month Earnout Period during that particular period, respectively (such earnout periods sometimes being referred to individually as an “Earnout Period” and, collectively, as the “Earnout Periods”).
(2) “Baseline EBITDA Amount” means (A) with respect to the Second 12-Month Earnout Period, the Actual EBITDA Amount of the First 12-Month Earnout Period, and (B) with respect to the Third and Final 12-Month Earnout Period, the Actual EBITDA Amount of the Second 12-Month Earnout Period; provided, however, that in no event shall the Baseline EBITDA Amount applicable to any Earnout Period be less than the highest Actual EBITDA Amount for any Earnout Period.
(3) “EBITDA” means the cumulative consolidated earnings generated by the Aligned Division, before interest expense, income taxes, depreciation and amortization, determined in accordance with U.S. generally accepted accounting principles.
(4) “First 12-Month Earnout Period” means the period commencing on the first day of the calendar month in which the Closing Date occurs and ending on the last day of the twelfth (12th) full calendar month thereafter.
(5) “Second 12-Month Earnout Period” means the period commencing on the first day of the calendar month immediately following the end of the First 12-Month Earnout Period and ending on the last day of the twelfth (12th) full calendar month thereafter.
(6) “Third and Final 12-Month Earnout Period” means the period commencing on the first day of the calendar month immediately following the end of the Second 12-Month Earnout Period and ending on the last day of the twelfth (12th) full calendar month thereafter.
(ii) Within forty-five (45) days after each of the First 12-Month Earnout Period, the Second 12-Month Earnout Period and the Third and Final 12-Month Earnout Period, the Buyer shall determine the Actual EBITDA Amount for each such period. The Buyer will provide the Aligned Parties’ Representative (as defined in Section 5.4) with such determination, together with reasonable supporting documentation, within ten (10) days thereafter (the “EBITDA Calculations”). If the Aligned Parties’ Representative accepts the EBITDA Calculations, or if the Aligned Parties’ Representative fails to give notice to the Buyer of any objection within ten (10) days after receipt of the EBITDA Calculations, the EBITDA Calculations shall be the final and binding calculation of the Actual EBITDA Amount for the respective Earnout Period. If the Aligned Parties’ Representative gives notice to the Buyer of an objection to the EBITDA Calculations within thirty (30) days after receipt of the EBITDA Calculations, the Buyer and the Aligned Parties’ Representative shall attempt in good faith to resolve their differences. If the Buyer and the Aligned Parties’ Representative are able to resolve their differences, the EBITDA Calculations, as modified to reflect the resolution of the differences between the Buyer and the Aligned Parties’ Representative, shall be the final and binding calculation of the Actual EBITDA Amount for the respective Earnout Period. If, however, the Buyer and the Aligned Parties’ Representative are unable to resolve their differences, the Buyer and the Aligned Parties’ Representative shall submit any disputed items to a certified public accountant reasonably satisfactory to the Buyer and Aligned Parties’ Representative for a resolution of the dispute. The determination of the certified public accountant shall be final and binding on the Buyer and the Aligned Parties’ Representative, and the EBITDA Calculations, as modified to reflect (i) those differences, if any, that the Buyer and the Aligned Parties’ Representative were able to resolve, and (ii) the certified public accountant’s determination with regard to the remaining disputed items, shall be the final and binding resolution of the Actual EBITDA Amount for the applicable Earnout Period.
(iii) Once the Actual EBITDA Amount is finally determined for the First 12-Month Earnout Period pursuant to Section 1.2(c)(ii), the Buyer shall issue to the Sellers, within thirty (30) days thereafter, twelve (12) shares of Buyer Stock for each dollar of the Actual EBITDA Amount for the First 12-Month Earnout Period.
(iv) Once the Actual EBITDA Amount is finally determined for the Second 12-Month Earnout Period pursuant to Section 1.2(c)(ii), if the Actual EBITDA Amount exceeds the Baseline EBITDA Amount applicable to the Second 12-Month Earnout Period, the Buyer shall issue to the Sellers, within thirty (30) days thereafter, twelve (12) shares of Buyer Stock for each dollar of such excess.
(v) Once the Actual EBITDA Amount is finally determined for the Third and Final 12-Month Earnout Period pursuant to Section 1.2(c)(ii), if the Actual EBITDA Amount exceeds the Baseline EBITDA Amount applicable to the Third and Final 12-Month Earnout Period, the Buyer shall issue to the Sellers, within thirty (30) days thereafter, twelve (12) shares of Buyer Stock for each dollar of such excess.
(vi) Notwithstanding any provision of this Section 1.2(c) to the contrary, in no event shall the Buyer be required to issue to the Sellers more than 3,500,000 shares of Buyer Stock, in the aggregate, as Post-Closing Earnout Stock, and there shall be no earnout or other obligation to make any payment or issue any shares of Buyer Stock under this Agreement with respect to any post-Closing period other than as expressly provided in Section 1.2(b) or the Earnout Periods as expressly set forth in this Section 1.2(c).
(d) Repurchase Right. Notwithstanding anything to the contrary in this Agreement, if the Company has not entered into a Qualifying MSO Contract (as defined below) on or before the one (1) year anniversary of the Closing Date, then (i) at any time and from time to time thereafter the Buyer shall have the right, which it may exercise or decline to exercise in its sole and absolute discretion, to repurchase any or all of the shares of Buyer Stock for the price per share of $0.05 (as adjusted for any stock dividends, combinations or splits), and (ii) the obligation of the Buyer to issue any unissued Contingent Stock or any Post-Closing Earnout Stock shall immediately terminate. Any such repurchase shall be made on a pro rata basis among the Sellers based on the number of shares of Buyer Stock then held by them. If the Buyer exercises its right to repurchase the Buyer Stock, it shall provide written notice thereof to each Seller, specifying the number of shares of Buyer Stock to be repurchased from such Seller and the address to which such Seller shall send the certificate(s) representing the shares of Buyer Stock being repurchased. Each Seller shall then surrender to the Buyer such certificate(s) for cancellation and the repurchase price for such shares shall be payable to such Seller. Upon such payment to any Seller, the Buyer shall become the legal and beneficial owner of the shares of Buyer Stock being repurchased and all right, title and interest in and to such shares. For purposes of this Agreement, a “Qualified MSO Contract” means a bona fide, duly executed and legal, valid and binding written agreement between the Company, on the one hand, and a health plan, an Independent Physician Association or a hospital, on the other hand, providing that the Company shall (i) provide case management services or (ii) manage, administer or operate one or more 24-hour physician and nursing call centers and provide any related services and which has a term of at least one (1) years and provides aggregate net revenues to the Company of not less than $1,000,000.
1.3 No Assumption of Liabilities. Neither the Buyer nor any of its affiliates shall, by the execution or performance of this Agreement or otherwise, assume, become responsible for or incur any debt, liability or obligation of the Company or any Aligned Party, of any type or description whatsoever, whether related or unrelated to the Assets or the Transactions, incurred, accrued or arising on or before the Closing Date (as defined below), all of which shall be assumed by and become or remain the responsibility of the Aligned Parties.
1.4 Closing.
(a) The closing (the “Closing”) of the Transactions will take place shall take place as promptly as practical (but in any event no later than five (5) business days) after the date on which the last of the conditions set forth in Sections 7 and 8 is fulfilled or waived or on such other date as the Buyer and the Aligned Parties’ Representative shall agree (the “Closing Date”). At the election of the Buyer and the Sellers, the Closing may take place through an exchange of consideration and documents using overnight courier service, facsimile or electronic transmission.
(b) At the Closing, the Buyer shall make the following deliveries:
(i) the Buyer shall deliver to the Sellers certificates representing the Initial Shares;
(ii) the Buyer shall cause the Company to execute and deliver to Khalil a Consulting Agreement in substantially the form of Exhibit A hereto (the “Khalil Consulting Agreement”);
(iii) the Buyer shall cause the Company to execute and deliver to Reese a Consulting Agreement in substantially the form of Exhibit A hereto (the “Reese Consulting Agreement”);
(iv) the Buyer shall deliver to Aligned LLC the Right of First Refusal Agreement in substantially the form of Exhibit B hereto (the “ROFR Agreement”); and
(v) the Buyer shall execute and deliver to the Aligned Parties the certificate described in Section 8.2.
(c) At the Closing, the Aligned Parties shall make the following deliveries:
(i) the Aligned Parties shall deliver to the Buyer executed copies of the Transaction Documents, the Aligned Agreements and such other documents and instruments effecting the Asset Sale in form and substance reasonably satisfactory to the Buyer;
(ii) Khalil shall execute and deliver to the Buyer the Khalil Consulting Agreement and a Proprietary Information Agreement in favor of Aligned LLC;
(iii) McReynolds shall execute and deliver to the Buyer a Proprietary Information Agreement in favor of Aligned LLC;
(iv) Reese shall execute and deliver to the Buyer the Reese Consulting Agreement and a Proprietary Information Agreement in favor of Aligned LLC;
(v) Aligned LLC shall execute, shall cause its members to execute and shall deliver to the Buyer the ROFR Agreement;
(vi) the Aligned Parties shall deliver to the Buyer a certificate of good standing of each of the Company, Aligned LLC and Aligned Corp., issued not more than seven (7) business days prior to the Closing Date by the Secretary of State of the State of California;
(vii) the Company shall deliver to the Buyer a true and complete copy of the Articles of Incorporation of the Company, as in effect on the Closing Date, certified by the Secretary of State of the State of California;
(viii) the Company shall deliver to the Buyer a true and complete copy of the by-laws of the Company, as in effect on the Closing Date, certified by the Secretary of the Company;
(ix) the Company shall deliver to the Buyer a true and complete copy of the duly adopted resolutions of the Board of Directors of the Company approving the execution, delivery and performance of this Agreement and the Transaction Documents, certified by the Secretary of the Company;
(x) Aligned Corp. shall deliver to the Buyer a true and complete copy of the duly adopted resolutions of the Board of Directors and the shareholders of Aligned Corp. approving the execution, delivery and performance of this Agreement and the Transaction Documents, certified by the Secretary of the Company;
(xi) Aligned LLC shall deliver to the Buyer a true and complete copy of the duly adopted resolutions of the managers and members of Aligned LLC approving the execution, delivery and performance of this Agreement and the Transaction Documents, certified by the managers of Aligned LLC;
(xii) the Company shall deliver to the Buyer executed resignations of each director and each officer of the Company;
(xiii) each Seller shall deliver to the Buyer certificate(s) representing the Shares, accompanied by stock powers duly executed in blank by each Seller;
(xiv) the Company shall deliver to the Buyer the minute book, seal and all other books and records of the Company;
(xv) each individual Seller who is married shall deliver to the Buyer a Confirmation of Spouse, in form and substance reasonably satisfactory to the Buyer, consenting to this Agreement, the Transaction Documents to which the Seller is a party, and the Transactions to which the Seller is a party, duly executed by the spouse of the Seller;
(xvi) to the extent required, consents, approvals or regulatory actions from any public or governmental authority;
(xvii) the Aligned Parties shall execute and deliver to the Buyer the certificate described in Section 7.2; and
(xviii) the Aligned Parties shall deliver to the Buyer such other certificates and documents as the Buyer or its counsel may reasonably request.
ARTICLE 2
REPRESENTATIONS AND WARRANTIES OF ALIGNED PARTIES
Each Aligned Party, jointly and severally, represents and warrants to the Buyer that the statements contained in this Article 2 are correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout this Article 2), except as set forth in Schedule II attached hereto. Each Aligned Party agrees that the representations and warranties made in this Article 2 shall survive the Closing as provided in Section 11.1.
2.1 Organization, Standing and Qualification. Aligned Corp. is a professional medical corporation duly organized, validly existing and in good standing under the laws of the State of California. Aligned LLC is a limited liability company duly organized, validly existing and in good standing under the laws of the State of California. Reese LLC is a limited liability company duly organized, validly existing and in good standing under the laws of its state of formation. The Company is a corporation duly organized, validly existing and in good standing under the laws of the State of California. Each of Aligned Corp., Aligned LLC and the Company has full power and authority to own and lease its properties and to carry on its business as now conducted. The Company is not required to be qualified or licensed to conduct business as a foreign corporation in any other jurisdiction.
2.2 Capitalization. Schedule 2.2 sets forth the authorized and outstanding capital of the Company, the names and addresses of the record and beneficial owners of all of the issued and outstanding capital stock of the Company, the number of shares so owned, and the allocation of the Purchase Price among the Sellers as agreed to among themselves. All of the issued and outstanding shares of the capital stock of the Company are owned of record and beneficially by the Sellers, as set forth on Schedule 2.2, and are and as of the Closing will be free and clear of all liens, security interests, encumbrances, restrictions, pledges and claims of every kind except as set forth on Schedule 2.2. Each share of the capital stock of the Company is duly and validly authorized and issued, fully paid and nonassessable, and was not issued in violation of any preemptive rights of any past or present shareholder of the Company. No option, warrant, call, conversion or other right or commitment of any kind (including any of the foregoing created in connection with any indebtedness of the Company) exists that obligates the Company to issue any of its authorized but unissued capital stock or other equity interest or that obligates the Sellers to transfer any Shares to any person. Neither the Company nor any Seller is a party to any, and there exist no, voting trusts, stockholder agreements, pledge agreements, or other agreements relating to or restricting the transferability of any Shares or any other equity interest in the Company. The Shares have been issued in accordance with all applicable federal and state securities laws. The Shares being acquired by the Buyer hereunder constitute all of the outstanding capital stock of the Company. The Company has no subsidiaries and owns no securities or other equity interest in any other person or entity. The sole member of Mobile Doctors 24/7, LLC, a California limited liability company (“Mobile Doctors”), is Khalil. The sole member of Reese LLC is Reese.
2.3 Authority; Enforceability. Each Aligned Party has the full right, power and authority to enter into this Agreement, all other agreements and documents executed in connection with the Transactions (collectively, the “Transaction Documents”) and the Transactions, and all documents and agreements necessary to give effect to the provisions of this Agreement and the Transaction Documents and to the Transactions, and to perform its, his or her obligations hereunder and thereunder. The execution and delivery of this Agreement and the Transaction Documents to which it is a party by each of the Company, Reese LLC, Aligned Corp. and Aligned LLC and the consummation of the Transactions by the Company, Reese LLC, Aligned Corp. and Aligned LLC have been duly authorized by the Company’s and Aligned Corp.’s Board of Directors and by Aligned LLC’s and Reese LLC’s managers, and all other actions and proceedings required to be taken by or on behalf of the Company, Reese LLC, Aligned Corp. and Aligned LLC to enter into this Agreement and consummate the Transactions have been duly and properly taken. This Agreement and the Transaction Documents have been duly and validly executed and delivered by the Aligned Parties who are a party thereto and, subject to the due authorization, execution and delivery by the Buyer, constitute the legal, valid and binding obligations of each Aligned Party who is a party thereto, enforceable against each such Aligned Party in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally and by general principles of equity.
2.4 No Violation or Approval. The execution and delivery by the Aligned Parties of this Agreement and the Transaction Documents to which they are a party, and the consummation by the Aligned Parties of the Transactions to which they are a party, will not, after the giving of notice or lapse of time or otherwise:
(a) violate or result in the breach of any of the terms or conditions of, or constitute a default under, or allow for the acceleration or termination of, or in any manner release any party from any obligation under, or result in any lien, claim or encumbrance on the Shares or the assets of the Company under, any mortgage, deed, lease, note, bond, indenture, agreement, license or other instrument or obligation of any kind or nature to which any Aligned Party or the Company is a party, or by which any Aligned Party or the Company, or any Aligned Party’s or the Company’s assets, is or may be bound or affected;
(b) violate any law, rule or regulation, or any order, writ, injunction or decree of any court, administrative agency or governmental authority, or require the approval, consent or
(c) violate the Articles of Incorporation or Bylaws of the Company or Aligned Corp., or the Articles of Organization or the Operating Agreement of Aligned LLC.
2.5 Ownership of Assets. The Assets are listed on Schedule 2.5. Aligned Corp. and Aligned LLC each received fair value for the Assets each sold and conveyed (directly or indirectly) to the Company in connection with the Asset Sale. The Company has good and marketable title to all of the Assets free and clear of any mortgage, security interest, defect, pledge, lien, claim, conditional sales agreement, lease, encumbrance, charge or rights of third parties whatsoever. The Company does not own nor has it ever owned any tangible or intangible properties or assets of whatever kind or nature other than the Assets. The Company does not own, lease, maintain or use, nor has it ever owned, leased, maintained or used, any real property.
2.6 Contracts; Liabilities; Employees; Operations.
(a) Other than the Transaction Documents to which it is a party, the Company is not a party to nor is it bound by, nor has it ever been a party to or been bound by, any oral or written contract, agreement or any other obligations of any kind or nature whatsoever.
(b) The Company has never had, does not have, nor will it have as of the Closing Date any liabilities of any nature, whether accrued, absolute, contingent or otherwise (including tax liabilities due or to become due), other than California minimum franchise taxes which automatically accrue upon corporate formation and which have been paid in full.
(c) The Company does not have, nor has it ever had, any employees or independent contractors.
(d) Since its inception, the Company has not conducted any activities, business or operations, other than activities directly related to the formation of the Company.
2.7 Losses and Litigation. Neither the Company nor any Aligned Party is a party to or engaged in any action, suit, governmental proceeding or investigation or arbitration, nor is aware of any pending or threatened claim, proceeding, or investigation, or any basis therefor, involving or relating in any way to the Transactions, the Company, the Assets or the business or operations of the Company as contemplated to be conducted following the Closing. No Aligned Party knows of any facts upon which material claims may hereafter be made against the Company or any Aligned Party involving or relating in any way to the Transactions, the Assets or the business or operations of the Company as contemplated to be conducted following the Closing. Neither the Company nor the Assets are subject to any judgment, order, injunction, or decree of any court, administrative agency, or other governmental authority or arbitration award.
2.8 Compliance with Laws: Governmental Authorizations. Each of the Company, Aligned Corp. and Aligned LLC is in compliance with all applicable laws, statutes, orders, rules and regulations promulgated by, or judgments entered by, any federal, state, or local court or governmental authority relating to or affecting the operation, conduct or ownership of the Assets or the business or operations of the Company as contemplated to be conducted following the Closing, except where the failure to be in substantial compliance would not have a material adverse effect upon the business, operations or financial condition of either the Company or the Assets. Without limiting the generality of the foregoing, the Company, Aligned Corp. and Aligned LLC are in compliance with all applicable state and federal regulations relating to licenses, standards of testing, rebates and kickbacks, accreditation of personnel and compliance with governmental reimbursement programs. All reports and returns required by federal, state or municipal authorities with respect to the operations of the Company, Aligned Corp. and Aligned LLC have been filed, and all sums due with respect to such reports and returns have been paid. No Aligned Party has received any notice from any federal, state or other governmental authority or agency having jurisdiction over its properties or activities or any insurance or inspection body that its operations or any of their respective properties, facilities, equipment or business procedures or practices fail to comply with any applicable law, ordinance, regulation, building or zoning law or requirement of any public or quasi-public authority or body.
2.9 Fraud and Abuse. Aligned Corp., Aligned LLC and their respective officers, directors, managers and persons or entities providing professional services for Aligned Corp. have not engaged in any activities which are prohibited under U.S.C. Section 1320a-7b, or the regulations promulgated thereunder, or under any state or local statutes or regulations, or which are prohibited by rules of professional conduct, including but not limited to, the following: (a) knowingly and willfully making or causing to be made a false statement or representation of a material fact in any application for any benefit or payment; (b) knowingly and willfully making or causing to be made any false statement or representation of a material fact for use in determining rights to any benefit or payment; (c) failure to disclose knowledge by a claimant of the occurrence of any event affecting the initial or continued right to any benefit or payment on its own behalf or on behalf of another, with intent to fraudulently secure such benefit or payment; and (d) knowingly soliciting or receiving any remuneration (including any kickback, bribe or rebate), directly or indirectly, overtly or covertly, in cash or in kind or offering to pay or receive such remuneration (i) in return for referring an individual to a person for the furnishing or arranging for the furnishing of any item or service or (ii) in return for purchasing, leasing or ordering or arranging for or recommending purchasing, leasing or ordering any good, facility, service or item.
2.10 Power of Attorney. The Company has not given any power of attorney, whether limited or general; to any person which is continuing in effect.
2.11 Intellectual Property. The Company owns or possesses sufficient legal rights to the Assets which constitute intellectual property rights, including without limitation patents, trademarks, service marks, tradenames, copyrights, trade secrets, licenses, information and proprietary rights and processes (the “Company Intellectual Property”) to use such Company Intellectual Property in the Company’s business as proposed to be conducted, without any known conflict with, or infringement of, the rights of others. The Company Intellectual Property has either been independently derived without any knowing violation by the Company or any Aligned Party of any rights of others or, with respect to any Company Intellectual Property that has been developed for the Aligned Parties by other third parties, the Aligned Party has instructed such other third parties to not violate any such rights of others and no Aligned Party has any knowledge that such third parties have violated any such rights. No Aligned Party has received any communications alleging that any Aligned Party has violated or, by conducting its business, would violate any of the patents, trademarks, service marks, tradenames, copyrights, trade secrets or other proprietary rights or processes of any other person or entity. The Aligned Parties reasonably believe that it will not be necessary to use any inventions of any persons it intends to hire made prior to their employment by the Company, other than any business models, operational specifications, blueprints, financial models, or similar work product created by, or at the direction of any Aligned Party in contemplation of the Company and its business (all of which belong to the Company and to the Aligned Parties’ knowledge were not made in infringement of any third party’s rights).
2.12 Conflicts of Interest.
(a) Other than this Agreement, the Transaction Documents and the consulting and employment agreements attached to this Agreement as Schedule 2.12 (the “Aligned Agreements”), there are no agreements, understandings or proposed transactions between the Company and any of the Aligned Parties, or between Aligned Corp. or Aligned LLC, on the one hand, and any of Khalil, McReynolds or Reese, on the other hand, or their respective spouses or children or any affiliate of any of the foregoing, that could materially affect the Company, the ownership or operation of its business as presently contemplated to be conducted or the obligations of any Aligned Party under this Agreement or any Transaction Document. The Buyer acknowledges and agrees that, simultaneously with the provision of services to the Company by Khalil, McReynolds and Reese under the terms of the Transaction Documents, Khalil (acting through Mobile Doctors), McReynolds and Reese will continue to be employed by or otherwise provide services to Aligned Corp. and Aligned LLC pursuant to the Aligned Agreements.
(b) None of the Aligned Parties (i) are, directly or indirectly, indebted to the Company or (ii) have any direct or indirect ownership interest (other than ownership of less than 1% of a any firm, corporation or similar entity whose securities trade on a national securities exchange or NASDAQ) in any firm or corporation which will likely compete with the Company outside of the Aligned Territory assuming it conducts business as contemplated.
2.13 Status of Negotiations. The status of the Aligned Parties’ negotiations relating to the Company’s prospective provision of 24 hour physician and nursing call center services outside of the Aligned Territory is summarized on Schedule 2.13. The Aligned Parties have disclosed to the party or parties with whom the Aligned Parties are negotiating on the Company’s behalf that the Sale of Shares is pending and would result in a change in control of the Company, and such party or parties have consented to or will consent to such change in control arising from the Sale of Shares.
2.14 No Broker’s Fees. Neither the Company nor any Aligned Party has done anything to cause or incur any liability or obligation on its part for investment banking, brokerage, finder’s, agent’s or other fees, commissions, expenses or charges in connection with the negotiation, preparation, execution or performance of this Agreement or the consummation of the Transactions and knows of no claim by anyone for such payment.
2.15 Full Disclosure. Neither this Agreement nor any schedule, exhibit, list, certificate or other instrument or document delivered to the Buyer pursuant to this Agreement by or on behalf of any Aligned Party contains any untrue statement of a material fact or, to the knowledge of the Aligned Parties, omits to state any material fact required to be stated herein or therein or necessary to make the statements, representations or warranties and information contained herein, or therein not misleading. The Aligned Parties represent that they have not withheld from the Buyer disclosure of any event, condition or fact which any Aligned Party knows would materially adversely affect the Assets, or the operations or prospects of the Call Center Business or Assets.
ARTICLE 3
INVESTOR REPRESENTATIONS AND WARRANTIES OF SELLERS
Each Seller, severally and not jointly, represents and warrants to the Buyer that the statements contained in this Article 3 are correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout this Article 3). Each Seller agrees that the representations and warranties made in this Article 3 shall survive the Closing as provided in Section 11.1.
3.1 Buyer Stock Acquired for Own Account. The shares of Buyer Stock are being acquired by the Seller and not by any other person, and for the account of the Seller, not as a nominee or agent and not for the account of any other person. No other person will have any interest, beneficial or otherwise, in any shares of the Buyer Stock. The Seller is not obligated to transfer any shares of Buyer Stock to any other person, nor does the Seller have any agreement or understanding to do so. The Seller is purchasing the shares of Buyer Stock for investment for an indefinite period not with a view to the sale or distribution of any part or all of the shares of Buyer Stock by public or private sale or other disposition. The Seller has no intention of selling, granting any participation in or otherwise distributing or disposing of any shares of Buyer Stock. The Seller does not intend to subdivide the Seller’s acquisition of shares of Buyer Stock with any person.
3.2 Buyer Stock Not Registered for Resale. The Seller has been advised that the Buyer Stock has not been and will not be registered or qualified under 1933 Act, the California Corporate Securities Law of 1968, as amended (the “California Securities Law”), or any other securities law, on the ground, among others, that no distribution or public offering of the Buyer Stock is to be effected and the Buyer Stock will be issued by the Buyer in connection with a transaction that does not involve any public offering within the meaning of Section 4(2) of the 1933 Act or applicable provisions of the California Securities Law and other securities laws and regulations, or under the respective rules and regulations thereunder of the Securities and Exchange Commission, the California Commissioner of Corporations and the administrators of such other laws and regulations. The Seller understands that the Buyer is relying in part on the Seller’s representations as set forth herein for purposes of claiming such exemptions and that the basis for such exemptions may not be present if, notwithstanding the Seller’s representations, the Seller has in mind merely acquiring the Buyer Stock for resale on the occurrence or non-occurrence of some predetermined event. The Seller has no such intention.
3.3 Sophistication or Prior Business Relationship. The Seller, either alone or with the Seller’s professional advisors who are unaffiliated with, have no equity interest in and are not compensated by the Buyer or any affiliate or selling agent of the Buyer, directly or indirectly, has such knowledge and experience in financial and business matters that the Seller is capable of evaluating the merits and risks of investment in Securities and has the capacity to protect the Seller’s own interests in connection with the Seller’s proposed investment in the Buyer Stock, or the Buyer has a preexisting personal or business relationship with the Buyer or any of its officers, directors or controlling persons. The Seller is an “accredited investor” as provided by Regulation D under the 1933 Act, and has so indicated such status by marking one of the categories of “accredited investor” on the Seller’s Offering Questionnaire that it has furnished to the Buyer.
3.4 Offering Questionnaire. The Seller has previously furnished to the Buyer a completed and signed Offering Questionnaire. The information in the Seller’s completed and signed Offering Questionnaire previously delivered or being delivered to the Buyer, which is incorporated herein by reference, is true and complete in all respects as of the date hereof.
3.5 Information about Buyer. The Seller acknowledges that the Seller has been furnished with such financial and other information concerning the Buyer, the directors and officers of the Buyer and the business and proposed business of the Buyer as the Seller considers necessary in connection with the Seller’s investment in the Buyer Stock. The Seller has conducted the Seller’s own thorough and comprehensive investigation and review of, and is thoroughly familiar with, the existing and proposed management, business, operations, properties and financial condition of the Buyer. The Seller has discussed with officers of the Buyer any questions the Seller may have had with respect thereto. The Seller understands:
(a) The extreme risks involved in acquiring the Buyer Stock;
(b) The financial hazards involved in acquiring the Buyer Stock, including the risk of losing the Seller’s entire investment; and
(c) The lack of liquidity and restrictions on transfers of the Buyer Stock; and
The Seller has consulted with the Seller’s own legal, accounting, tax, investment and other advisors with respect to the tax consequences of the Sale of Shares and the Seller’s acquisition of the Buyer Stock and the merits and risks of acquiring the Buyer Stock. In making any decision regarding the acquisition of the Buyer Stock, the Seller has relied and will rely entirely on the Seller’s own investigation of the Buyer and its businesses, management, operations, properties and financial condition.
3.6 Risk of Loss. Understanding that the acquisition of the Buyer Stock is highly speculative, the Seller is able to bear the economic risk of such investment.
3.7 No Advertising. The offer to issue the Buyer Stock was directly communicated to the Seller by the Buyer in a manner such that the Seller was able to ask questions of and receive answers from the officers of the Buyer concerning the terms and conditions of this transaction. At no time was the Seller presented with or solicited by any leaflet, public promotional meeting, newspaper, magazine, radio or television article or advertisement, or other form of advertising or general solicitation.
ARTICLE 4
REPRESENTATIONS AND WARRANTIES OF BUYER
The Buyer represents and warrants to each of the Aligned Parties that the statements contained in this Article 4 are correct and complete as of the date of this Agreement and will be correct and complete as of the Closing Date (as though made then and as though the Closing Date were substituted for the date of this Agreement throughout this Article 4). The Buyer agrees that the representations and warranties made in this Article 4 shall survive the Closing as provided in Section 11.1.
4.1 Due Organization and Good Standing. The Buyer is a corporation duly organized, validly existing, and in good standing under the laws of the State of Delaware with full corporate power and corporate authority to own and lease its properties and to carry on its business as now conducted.
4.2 Authority; Enforceability. The Buyer has the full right, power and authority to enter into this Agreement, the Transaction Documents to which it is a party and the Transactions to which it is a party, and all documents and agreements necessary to give effect to the provisions of this Agreement and the Transaction Documents to which it is a party and to the Transactions to which it is a party, and to perform its obligations hereunder and thereunder. The execution and delivery of this Agreement and the Transaction Documents to which it is a party by the Buyer and the consummation of the Transactions to which it is a party by the Buyer have been duly authorized by the Buyer’s Board of Directors, and all other actions and proceedings required to be taken by or on behalf of the Buyer to enter into this Agreement and consummate the Transactions to which it is a party have been duly and properly taken. This Agreement and the Transaction Documents to which it is a party have been duly and validly executed and delivered by the Buyer and, subject to the due authorization, execution and delivery by the Aligned Parties, constitute the legal, valid and binding obligations of the Buyer, enforceable against the Buyer in accordance with their respective terms, except as enforcement may be limited by bankruptcy, insolvency, reorganization or similar laws affecting creditors’ rights generally and by general principles of equity.
4.3 No Violation or Approval. The execution and delivery by the Buyer of this Agreement and the Transaction Documents to which it is a party, and the consummation by the Buyer of the Transactions to which it is a party, will not, after the giving of notice or lapse of time or otherwise:
(a) violate or result in the breach of any of the terms or conditions of, or constitute a default under, or allow for the acceleration or termination of, or in any manner release any party from any obligation under, or result in any lien, claim or encumbrance on the shares of Buyer Stock or the assets of the Buyer under, any mortgage, deed, lease, note, bond, indenture, agreement, license or other instrument or obligation of any kind or nature to which the Buyer is a party, or by which the Buyer, or the Buyer’s assets, is or may be bound or affected;
(b) violate any law, rule or regulation, or any order, writ, injunction or decree of any court, administrative agency or governmental authority, or require the approval, consent or permission of any governmental or regulatory authority; or
(c) violate the Certificate of Incorporation or Bylaws of the Buyer.
4.4 No Broker’s Fees. The Buyer has not done anything to cause or incur any liability or obligation on its part for investment banking, brokerage, finder’s, agents or other fees, commissions, expenses or charges in connection with the negotiation, preparation, execution or performance of this Agreement or the consummation of the Transactions, and the Buyer does not know of any claim by anyone for such payment.
4.5 SEC Reports. To its knowledge, the Buyer has filed all reports required to be filed with the U.S. Securities and Exchange Commission (the “SEC”) pursuant to the Securities Exchange Act of 1934, as amended (the “1934 Act”), since January 1, 2009 (all such reports, including those to be filed prior to the Closing Date, are collectively referred to as the “Buyer SEC Reports”), and has previously furnished or made available (through EDGAR) to the Sellers true and complete copies of all the Buyer SEC Reports (including any exhibits thereto) and will promptly furnish or make available (through EDGAR) to the Sellers any Buyer SEC Reports filed between the date hereof and the Closing Date. All of such Buyer SEC Reports complied at the time they were filed, in all material respects, with applicable requirements of the 1934 Act and the rules and regulations thereunder.
ARTICLE 5
COVENANTS OF THE ALIGNED PARTIES
5.1 Aligned Parties’ Restrictive Covenants.
(a) Restrictive Covenants.
(i) The Buyer and the Aligned Parties acknowledge that (a) the Buyer, as the purchaser of the Shares, following the Closing will be engaged in the provision of services relating to patient case management or the management, administration and operation of 24-hour physician and nursing call centers and related services (the “Call Center Business”); (b) the Aligned Parties are intimately familiar with the Call Center Business; (c) the Call Center Business is currently conducted in the Aligned Territory and the Buyer intends to expand the Call Center Business into other geographic areas outside of the Aligned Territory; (d) the Aligned Parties have had access to trade secrets of and confidential information concerning the Assets and the Call Center Business; (e) the Buyer is currently engaged in the provision of in-patient physician services at hospitals and other acute or post-acute facilities and contracts directly with acute or post-acute facilities, medical group and health plans with other activities related thereto (the “Hospitalist Business”) throughout the United States; (f) the agreements and covenants contained in this Section 5.1 are essential to protect the goodwill being acquired as part of the Assets; and (g) but for the agreement of the Aligned Parties to the provisions of this Section 5.1, the Buyer would not have agreed to enter into this Agreement and the Transactions to which it is a party.
(ii) Each Aligned Party covenants and agrees that, during the Restricted Period, the Aligned Parties and their affiliates shall not, anywhere in the United States outside of the Aligned Territory, directly or indirectly, acting individually or as the owner, shareholder, partner, member, employee or consultant of any entity other than the Buyer or one of its subsidiaries, directly or indirectly, (A) engage in or own or operate a business competitive with or similar to the Call Center Business; (B) whether or not for compensation, enter the employ of, or render any personal services to or for the benefit of, or assist in or facilitate the solicitation of customers for, or receive remuneration in the form of salary, commissions or otherwise from, any business competitive with or similar to the Call Center Business; (C) as owner or lessor of real estate or personal property, rent to or lease any facility, equipment or other assets to any business engaged in activities competitive with or similar to the Call Center Business; or (D) receive or purchase a financial interest in, make a loan to, or make a gift in support of, any such business in any capacity, including as a sole proprietor, partner, shareholder, member, officer, director, principal, agent, trustee or lender; provided, however, that an Aligned Party or an affiliate may own, directly or indirectly, solely as an investment, securities of any business traded on any national securities exchange or NASDAQ, provided that such Aligned Party or such affiliate is not a controlling person of, or a member of a group that controls, such business and further provided that such Aligned Party or such affiliate does not, in the aggregate, directly or indirectly, own two percent (2%) or more of any class of securities of such business.
(iii) Each Aligned Party covenants and agrees that, during the Restricted Period, the Aligned Parties and their affiliates shall not, anywhere in the United States, directly or indirectly, acting individually or as the owner, shareholder, partner, member, employee or consultant of any entity other than the Buyer or one of its subsidiaries, directly or indirectly, (A) engage in or own or operate a business competitive with or similar to the Hospitalist Business; (B) whether or not for compensation, enter the employ of, or render any personal services to or for the benefit of, or assist in or facilitate the solicitation of customers for, or receive remuneration in the form of salary, commissions or otherwise from, any business competitive with or similar to the Hospitalist Business; (C) as owner or lessor of real estate or personal property, rent to or lease any facility, equipment or other assets to any business engaged in activities competitive with or similar to the Hospitalist Business; or (D) receive or purchase a financial interest in, make a loan to, or make a gift in support of, any such business in any capacity, including as a sole proprietor, partner, shareholder, member, officer, director, principal, agent, trustee or lender; provided, however, that an Aligned Party or an affiliate may own, directly or indirectly, solely as an investment, securities of any business traded on any national securities exchange or NASDAQ, provided that such Aligned Party or such affiliate is not a controlling person of, or a member of a group that controls, such business and further provided that such Aligned Party or such affiliate does not, in the aggregate, directly or indirectly, own two percent (2%) or more of any class of securities of such business.
(iv) For purposes of this Agreement, the term “Restricted Period” shall mean the period beginning on the Closing Date and ending on the earliest to occur of (A) the removal or failure to re-elect Khalil as president of the Company, (B) the termination for any reason of Khalil’s engagement with the Company or any of its affiliates as an employee or consultant, and (C) the exercise by the Buyer of its right under Section 1.2(d) to repurchase all of the Buyer Stock then outstanding. The Restricted Period shall be extended by the number of days in any period in which any Aligned Party or an affiliate of any Aligned Party is determined by a court of competent jurisdiction to be in default or breach of this Section 5.1(a).
(b) Rights and Remedies On Breach. If any Aligned Party or an affiliate of any Aligned Party breaches, or threatens to commit a breach of, any of the provisions of Section 5.1(a) (the “Aligned Restrictive Covenants”), the Buyer shall have the following rights and remedies, each of which rights and remedies shall be independent of the others and severally enforceable, and each of which is in addition to, and not in lieu of, any other rights and remedies available to the Buyer at law or in equity:
(i) Specific Performance. Each Aligned Party agrees that any breach or threatened breach of the Aligned Restrictive Covenants would cause irreparable injury to the Buyer and that money damages would not provide an adequate remedy to the Buyer. Accordingly, in addition to any other rights or remedies, the Buyer shall be entitled to exercise the remedies set forth in Sections 11.2 and 11.3.
(ii) Accounting. The right and remedy to require each Aligned Party to account for and pay over to the Buyer all compensation, profits, monies, accruals, increments or other benefits derived or received by any Aligned Party as the result of any transactions constituting a breach of the Aligned Restrictive Covenants.
(iii) Severability of Covenants. Each Aligned Party acknowledges and agrees that the Aligned Restrictive Covenants are reasonable and valid in prohibited business activity and geographical and temporal scope and in all other respects. If the business activities, period of time or geographical area covered by the Aligned Restrictive Covenants should be deemed too extensive, then the parties intend that the Aligned Restrictive Covenants be construed to cover the maximum scope of business activities, period of time and geographical area (not exceeding those specifically set forth herein), if any, as may be permissible under applicable law.
(iv) Blue-Penciling. If any court determines that any of the Aligned Restrictive Covenants, or any part thereof, is unenforceable because of the scope of the business activities covered, the duration or the geographic area, such court shall reduce the scope duration or area of such provision, as the case may be, to the minimum extent necessary to render it enforceable and, in its reduced form, such provision shall then be enforced.
(v) Enforceability in Jurisdiction. The Buyer and the Aligned Parties intend to and hereby confer jurisdiction to enforce the Aligned Restrictive Covenants on the courts of any jurisdiction within the geographic scope of the Aligned Restrictive Covenants. If the courts of any one or more of such jurisdictions hold the Aligned Restrictive Covenants unenforceable by reason of the breadth of such scope or otherwise, such determination shall not bar or in any way affect the Buyer’s right to the relief provided above in the courts of any other jurisdiction within the geographic scope of the Aligned Restrictive Covenants as to breaches of such covenants in such other respective jurisdictions, such covenants as they relate to each jurisdiction being, for this purpose, severable into diverse and independent covenants.
5.2 Transfer Restrictions on Buyer Stock. Each Seller agrees that the Seller shall in no event Transfer (as defined below) any shares of Buyer Stock, nor shall the Seller receive any consideration for any shares of Buyer Stock from any person, for a period ending on the date which is thirteen (13) months following the Closing Date. The term “Transfer” as used in this Section 5.2 shall include any sale, assignment, transfer, conveyance, gift, encumbrance, pledge, bequest, devise, hypothecation, or other disposition of any shares of Buyer Stock, including a levy or attachment on any shares of Buyer Stock. Any attempted or purported Transfer in violation of this Section 5.2 shall be void and of no effect whatsoever. Notwithstanding the foregoing, Aligned Corp. may Transfer all or a part of the Initial Shares it receives pursuant to Section 1.2(a)(i) to McReynolds, Ragaa Ibrahim, M.D. and any other physician who is employed by Aligned Corp. at any time following the six (6) month anniversary of the Closing Date, provided that the Buyer determines in its sole discretion that each such Transfer complies with all applicable federal and state securities laws (and the Buyer shall have to right in its sole discretion to require such transferee to provide a completed investor questionnaire and Aligned Corp. to provide a legal opinion to the Buyer that such transfer complies with applicable federal and state securities laws, in each case in form and substance satisfactory to the Buyer) and, provided further, that any such transferee executes a joinder to this Agreement under which he or she agrees to become bound by the applicable provisions hereof, including without limitation Article III and this Article V.
5.3 Legends. The Buyer shall endorse the following legend on the face of each certificate representing shares of Buyer Stock, or on the reverse thereof with reference thereto on the face thereof:
THESE SHARES MAY NOT BE SOLD, ASSIGNED, TRANSFERRED, ENCUMBERED PLEDGED, HYPOTHECATED, GIVEN AS A GIFT OR OTHERWISE DISPOSED OF OR ALIENATED, VOLUNTARILY, BY OPERATION OF LAW, OR OTHERWISE, WHETHER OR NOT PURSUANT TO OR IN CONNECTION WITH ANY MERGER, CONSOLIDATION, RECAPITALIZATION, REORGANIZATION OR OTHER CORPORATE TRANSACTION, EXCEPT ONLY IN COMPLIANCE WITH THE STOCK PURCHASE AGREEMENT DATED FEBRUARY 15, 2011, A COPY OF WHICH IS ON FILE AT THE CORPORATION’S PRINCIPAL PLACE OF BUSINESS.
In addition, the certificate(s) representing Buyer Stock may bear such legends as the Buyer may consider necessary or advisable to facilitate compliance with the 1933 Act, the California Securities Law and any other securities law, including, without limitation, legends stating that the shares of Buyer Stock have not been registered or qualified under the 1933 Act, the California Securities Law or any other securities law and setting forth the limitations on dispositions imposed hereby.
5.4 Trademark License. To the extent the Marks (as defined below) are not included in the Assets or otherwise transferred or assigned to the Company pursuant to the Transaction Documents relating to the Asset Sale, Aligned Corp. and Aligned LLC hereby grant to the Company and the Buyer an exclusive, perpetual, irrevocable, transferable, sublicensable, royalty-free, fully paid up right and license to reproduce, use and display “Aligned Healthcare” and any similar names or marks and any designs used or associated therewith (collectively, the “Marks”) in the United States outside of the Aligned Territory. The Company and the Buyer shall have the sole discretion to determine when and how to reproduce, use and display the Marks in the United States outside of the Aligned Territory. Neither the Company nor the Buyer shall use the Marks for any purpose and under any circumstance in the Aligned Territory or outside of the United States. No Aligned Party shall use the Marks for any purpose and under any circumstance in the United States outside of the Aligned Territory. The Buyer and the Aligned Parties acknowledge and agree that the Purchase Price payable to the Sellers under this Agreement shall be the consideration for the rights and licenses granted under this Section 5.4, and that no additional fees, royalties or consideration whatsoever shall be payable in connection with any such rights and licenses granted under this Section 5.4.
5.5 Aligned Parties’ Representative.
(a) In order to administer efficiently the rights and obligations of the Aligned Parties under this Agreement, the Aligned Parties hereby designate and appoint Khalil as the Aligned Parties’ Representative (the “Aligned Parties’ Representative”) to serve as the Aligned Parties’ agent and attorney-in-fact for the limited purposes set forth in this Agreement.
(b) Each of the Aligned Parties hereby appoints the Aligned Parties’ Representative as such Aligned Party’s agent, proxy and attorney-in-fact, with full power of substitution, for all purposes set forth in this Agreement, including the full power and authority on such Aligned Party’s behalf (i) to consummate the Transactions; (ii) to disburse any Buyer Stock received hereunder to the Sellers; (iii) to execute and deliver on behalf of each Aligned Party any amendment of or waiver under this Agreement, and to agree to resolution of all Losses hereunder; (iv) to retain legal counsel and other professional services, at the expense of the Aligned Parties, in connection with the performance by the Aligned Parties’ Representative of this Agreement including all actions taken on behalf of the Aligned Parties as Indemnifying Party pursuant to Article 9; and (v) to do each and every act and exercise any and all rights which such Aligned Party or Aligned Parties are permitted or required to do or exercise under this Agreement, the Transaction Documents and the other agreements, documents and certificates executed in connection herewith and therewith. Each of the Aligned Parties agrees that such agency and proxy are coupled with an interest, are therefore irrevocable without the consent of the Aligned Parties’ Representative and shall survive the death, bankruptcy or other incapacity of any Aligned Party.
(c) Each of the Aligned Parties hereby agrees that any amendment or waiver under this Agreement, and any action taken on behalf of the Aligned Parties to enforce the rights of the Aligned Parties under this Agreement, and any action taken with respect to any Loss (including any action taken to object to, defend, compromise or agree to the payment of such Loss), shall be effective if approved in writing by the Aligned Parties’ Representative, and that each and every action so taken shall be binding and conclusive on every Aligned Party, whether or not such Aligned Party had notice of, or approved, such amendment or waiver.
(d) Khalil shall serve as the Aligned Parties’ Representative until he resigns or is otherwise unable or unwilling to serve. In the event that a Aligned Parties’ Representative resigns from such position or is otherwise unable or unwilling to serve, the remaining Aligned Parties shall select, by the vote of the holders of a majority of the Shares immediately prior to the Closing, a successor representative to fill such vacancy, shall provide prompt written notice to the Buyer of such change and such substituted representative shall then be deemed to be the Aligned Parties’ Representative for all purposes of this Agreement.
5.6 Certain Waivers.
(a) McReynolds acknowledges and agrees that she shall not have the right to receive any Contingent Stock or Post-Closing Earnout Stock under Section 1.2, and McReynolds irrevocably waives and disclaims any right to receive any Contingent Stock or Post-Closing Earnout Stock from the Buyer.
(b) Each of Aligned Corp., McReynolds, Reese LLC and Reese acknowledges and agrees that such party shall not receive any amounts under Section 6.3 and each such party irrevocably waives and disclaims any right to receive the same or any similar consideration from the Buyer.
(c) Each of Aligned Corp., McReynolds, Reese LLC and Reese acknowledges that in the event that at any time after the execution of this Agreement any of them hereafter discovers claims or facts which are not now known or suspected, or in the event that claims or facts now known have consequences or results not known or suspected, this Section 5.6 shall nevertheless constitute a full and final waiver as to each of Aligned Corp., McReynolds, Reese LLC and Reese and matters herein waived, and this waiver shall apply to and include all such unknown or unsuspected consequences or results. Each of Aligned Corp., McReynolds, Reese LLC and Reese has read and has been carefully advised by their attorneys of the contents of Section 1542 of the California Civil Code which reads as follows:
“A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR.”
Aligned Corp., McReynolds, Reese LLC and Reese, and each of them, have read and have been carefully advised by their attorneys of the contents of Section 1542. Aligned Corp., McReynolds, Reese LLC and Reese, and each of them, hereby expressly, unconditionally and irrevocably waive any and all rights and benefits under Section 1542.
ARTICLE 6
COVENANTS OF BUYER
6.1 Buyer’s Restrictive Covenants.
(a) Restrictive Covenants.
(i) The Buyer and the Aligned Parties acknowledge that (a) the Aligned Parties are and will continue to be engaged in the Call Center Business in the Aligned Territory; (b) the agreements and covenants contained in this Section 6.1 are essential to protect the goodwill of the Call Center Business being conducted by the Aligned Parties in the Aligned Territory; and (c) but for the agreement of the Buyer to the provisions of this Section 6.1, the Aligned Parties would not have agreed to enter into this Agreement and the Transactions to which they are a party.
(ii) The Buyer covenants and agrees that, during the Restricted Period, the Buyer, the Company and their respective affiliates (but excluding any non-management shareholder of the Buyer) shall not, anywhere in the Aligned Territory, directly or indirectly, acting individually or as the owner, shareholder, partner, member, employee or consultant of any entity other than Aligned LLC, Aligned Corp. or one of its subsidiaries, directly or indirectly, (A) engage in or own or operate a business competitive with or similar to the Call Center Business; (B) whether or not for compensation, enter the employ of, or render any personal services to or for the benefit of, or assist in or facilitate the solicitation of customers for, or receive remuneration in the form of salary, commissions or otherwise from, any business competitive with or similar to the Call Center Business; (C) as owner or lessor of real estate or personal property, rent to or lease any facility, equipment or other assets to any business engaged in activities competitive with or similar to the Call Center Business; or (D) receive or purchase a financial interest in, make a loan to, or make a gift in support of, any such business in any capacity, including as a sole proprietor, partner, shareholder, member, officer, director, principal, agent, trustee or lender; provided, however, that the Buyer, the Company or an affiliate may own, directly or indirectly, solely as an investment, securities of any business traded on any national securities exchange or NASDAQ, provided that such Aligned Party or such affiliate is not a controlling person of, or a member of a group that controls, such business and further provided that such Aligned Party or such affiliates does not, in the aggregate, directly or indirectly, own two percent (2%) or more of any class of securities of such business. The Restricted Period shall be extended by the number of days in any period in which the Buyer, the Company or any of their respective affiliates (but excluding any non-management shareholder of the Buyer) is determined by a court of competent jurisdiction to be in default or breach of this Section 6.1(a).
(b) Rights and Remedies On Breach. If the Buyer, the Company or an affiliate of either one (but excluding any non-management shareholder of the Buyer) breaches, or threatens to commit a breach of, any of the provisions of Section 6.1(a) (the “Buyer Restrictive Covenants”), Aligned Corp. and Aligned LLC shall have the following rights and remedies, each of which rights and remedies shall be independent of the others and severally enforceable, and each of which is in addition to, and not in lieu of, any other rights and remedies available to Aligned Corp. or Aligned LLC at law or in equity:
(i) Specific Performance. The Buyer agrees that any breach or threatened breach of the Buyer Restrictive Covenants would cause irreparable injury to Aligned Corp. and Aligned LLC and that money damages would not provide an adequate remedy to Aligned Corp. and Aligned LLC. Accordingly, in addition to any other rights or remedies, Aligned Corp. and Aligned LLC shall be entitled to exercise the remedies set forth in Sections 11.2 and 11.3.
(ii) Accounting. The right and remedy to require the Buyer to account for and pay over to Aligned Corp. and Aligned LLC all compensation, profits, monies, accruals, increments or other benefits derived or received by the Buyer, the Company or any of their respective affiliates as the result of any transactions constituting a breach of the Buyer Restrictive Covenants.
(iii) Severability of Covenants. The Buyer acknowledges and agrees that the Buyer Restrictive Covenants are reasonable and valid in prohibited business activity and geographical and temporal scope and in all other respects. If the business activities, period of time or geographical area covered by the Buyer Restrictive Covenants should be deemed too extensive, then the parties intend that the Buyer Restrictive Covenants be construed to cover the maximum scope of business activities, period of time and geographical area (not exceeding those specifically set forth herein), if any, as may be permissible under applicable law.
(iv) Blue-Penciling. If any court determines that any of the Buyer Restrictive Covenants, or any part thereof, is unenforceable because of the scope of the business activities covered, the duration or the geographic area, such court shall reduce the scope duration or area of such provision, as the case may be, to the minimum extent necessary to render it enforceable and, in its reduced form, such provision shall then be enforced.
(v) Enforceability in Jurisdiction. The Buyer and Aligned Corp. and Aligned LLC intend to and hereby confer jurisdiction to enforce the Buyer Restrictive Covenants on the courts of any jurisdiction within the geographic scope of the Buyer Restrictive Covenants. If the courts of any one or more of such jurisdictions hold the Buyer Restrictive Covenants unenforceable by reason of the breadth of such scope or otherwise, such determination shall not bar or in any way affect Aligned Corp. and Aligned LLC’s right to the relief provided above in the courts of any other jurisdiction within the geographic scope of the Buyer Restrictive Covenants as to breaches of such covenants in such other respective jurisdictions, such covenants as they relate to each jurisdiction being, for this purpose, severable into diverse and independent covenants.
6.2 Officer and Director Positions. The Buyer shall cause Khalil to be elected the president of the Company and a member of the Buyer’s board of directors as soon as practicable following the Closing.
6.3 Reimbursement of Certain Tax Payments. The Company shall reimburse Khalil for any federal or state income taxes payable by Raouf attributable to the issuance to Khalil of the Initial Shares and the Contingent Stock, if any. Any such reimbursement amounts shall be payable promptly after Khalil provides the Company with a letter indicating that his applicable tax returns are prepared and ready to file, the amount of such taxes and such taxes are due and payable. The aggregate amount of such reimbursement obligation shall in no event exceed $33,000 and Khalil shall not be entitled to any gross up with respect to any federal or state income tax payable on any amounts received under this Section 6.3.
ARTICLE 7
CONDITIONS TO OBLIGATIONS OF BUYER
The obligations of the Buyer to consummate the Transactions to which it is a party are subject to the satisfaction, on or prior to the Closing Date, of the following conditions:
7.1 Representations and Warranties: Compliance with Undertakings. All of the representations and warranties made by each of the Aligned Parties in this Agreement or any of the Transaction Documents shall be true and correct as of the date of this Agreement, shall be deemed to have been made again at and as of the Closing and shall be true and correct at and as of the Closing. Each of the Aligned Parties shall have performed and complied with all covenants and conditions required by this Agreement to be performed or complied with by each of the Aligned Parties prior to or at the Closing.
7.2 Officer’s Certificate. The chief executive officer of Aligned Corp. and the manager of Aligned LLC shall have delivered to the Buyer a certificate on behalf of Aligned Corp. and Aligned LLC, respectively, stating to such persons’ knowledge that the representations and warranties of each of the Aligned Parties set forth in this Agreement are true and correct as of the Closing and that the covenants of each of Aligned Parties set forth in this Agreement have been complied with as of the Closing.
7.3 Consents and Approvals. All necessary consents and approvals by third parties or governmental authorities to the Transactions shall have been provided to the Buyer.
7.4 No Litigation. There shall have been no litigation or other proceeding commenced or threatened by any person or entity with respect to the Transactions or otherwise having a materially adverse effect on or concerning the business, operations or financial condition of any of the Aligned Parties, the Company or the Assets. The Transactions shall not violate any order, decree, or judgment of any court or governmental body having competent jurisdiction and the Buyer shall not have determined that the Transactions have become inadvisable or impractical by reason of any order, decree or judgment of any court of competent jurisdiction materially restraining or prohibiting the effective operation by the Company of the Call Center Business after the Closing Date.
7.5 No Material Adverse Change. There shall have been no material adverse change in the business, operations, financial condition or prospects of Aligned Corp. or Aligned LLC, or of their affiliates.
7.6 Asset Sale. The Asset Sale shall have been consummated in accordance with the terms of the applicable Transaction Documents in form and substance reasonably satisfactory to the Buyer.
7.7 Shareholder and Member Approval. This Agreement, the Transactions Documents and the Transactions shall have been approved in all respects by the shareholders of Aligned Corp. and the members of Aligned LLC.
ARTICLE 8
CONDITIONS TO OBLIGATIONS OF ALIGNED PARTIES
The obligation of the Aligned Parties to consummate the Transactions to which they are a party is subject to the satisfaction, on or prior to the Closing Date, of the following conditions:
8.1 Representations and Warranties: Compliance with Undertakings. All of the representations and warranties made by the Buyer in this Agreement or any Transaction Documents shall be true and correct as of the date of this Agreement, shall be deemed to have been made again at and as of the Closing and shall be true and correct at and as of the Closing. The Buyer shall have performed and complied with all covenants and conditions required by this Agreement to be performed or complied with by the Buyer prior to or at the Closing.
8.2 Officer’s Certificate. The president of the Buyer shall have delivered to the Aligned Parties a certificate on behalf of the Buyer stating to the knowledge of such officer that the representations and warranties of the Buyer set forth in this Agreement are true and correct as of the Closing and that the covenants of the Buyer set forth in this Agreement have been complied with as of the Closing.
8.3 No Litigation. There shall have been no litigation or other proceeding commenced or threatened by any person or entity with respect to the Transactions or otherwise having a materially adverse effect on or concerning the business, operations or financial condition of the Buyer. The Transactions shall not violate any order, decree, or judgment of any court or governmental body having competent jurisdiction and the Aligned Parties shall not have determined that the Transactions have become inadvisable or impractical by reason of any order, decree or judgment of any court of competent jurisdiction materially restraining or prohibiting the Transactions.
8.4 Buyer Approval. This Agreement and the Transactions to which it is a party shall have been approved by all requisite action of the Board of Directors of the Buyer.
ARTICLE 9
INDEMNIFICATION
9.1 Indemnification by Aligned Parties. The Aligned Parties, jointly and severally, shall indemnify, hold harmless and reimburse the Buyer, the Company and each officer, director, controlling person, employee, affiliate and agent of the Buyer and the Company (but excluding Khalil, McReynolds and Reese) (each being a “Buyer Indemnified Party”) from and against any and all claims, losses, damages, liabilities, diminution of value and costs and related expenses (including, without limitation, settlement costs and any legal or other fees or expenses for investigating or defending any actions or threatened actions) (all of the foregoing being referred to below as “Losses”), whether or not involving a third party claim, reasonably incurred by such Buyer Indemnified Party in connection with any of the following (which right of indemnification and reimbursement will not be affected by any investigation conducted with respect to, or any knowledge acquired (or capable of being acquired) about the accuracy or inaccuracy of or compliance with any representation, warranty or covenant contained in the Agreement):
(a) any misrepresentation or breach of any warranty made by any Aligned Party in this Agreement or any of the Transaction Documents;
(b) the nonfulfillment or breach of any covenant, agreement or obligation of any Aligned Party contained in or contemplated by this Agreement or any of the Transaction Documents;
(c) any liabilities or obligations related to or arising from the Aligned Parties’ ownership, operation and/or management of the Assets on or prior to the Closing Date;
(d) any liabilities or obligations of the Company of any kind or nature whatsoever accruing on or prior to, arising out of or relating to the period ending on, the Closing Date; or
(e) any actions, suits, arbitrations, proceedings, demands, assessments, adjustments, costs and expenses (including, specifically, reasonable attorneys’ fees and expenses of investigation) incident to any of the foregoing.
9.2 Indemnification by Buyer. The Buyer shall indemnify, defend and hold harmless each Aligned Party and each shareholder, member, officer, director, manager, controlling person, employee, affiliate and agent of Aligned Corp. and Aligned LLC (each being a “Aligned Party Indemnified Party”) from and against any Losses, whether or not involving a third party claim, reasonably incurred by such Aligned Party Indemnified Party in connection with any of the following (which right of indemnification and reimbursement will not be affected by any investigation conducted with respect to, or any knowledge acquired (or capable of being acquired) about the accuracy or inaccuracy of or compliance with any representation, warranty or covenant contained in this Agreement):
(a) any misrepresentation or breach of any warranty made by the Buyer in this Agreement or any of the Transaction Documents;
(b) the nonfulfillment or breach of any covenant, agreement or obligation of the Buyer contained in or contemplated by this Agreement or any of the Transaction Documents; or
(c) any actions, suits, arbitrations, proceedings, demands, assessments, adjustments, costs and expenses (including, specifically, reasonable attorneys’ fees and expenses of investigation) incident to any of the foregoing.
9.3 Procedure. The Buyer Indemnified Party or the Aligned Party Indemnified Party (each, an “Indemnified Party”) shall promptly notify the Aligned Parties’ Representative, if the Indemnified Party is a Buyer Indemnified Party, or the Buyer, if the Indemnified Party is an Aligned Party Indemnified Party (each, an “Indemnifying Party”), of any claim, demand, action or proceeding for which indemnification will be sought under this Article 9, and, if such claim, demand, action or proceeding is a third party claim, demand, action or proceeding, the Indemnifying Party will have the right, at its expense, to assume the defense thereof using counsel reasonably acceptable to the Indemnified Party. The Indemnified Party shall have the right to participate, at its own expense, with respect to any such third party claim, demand, action or proceeding. In connection with any such third party claim, demand, action or proceeding, the parties hereto shall cooperate with each other and provide each other with access to relevant books and records in their possession. No such third party claim, demand, action or proceeding shall be settled without the prior written consent of the Indemnified Party, which consent shall not be unreasonably withheld.
9.4 No Exhaustion of Remedies or Subrogation; Right of Setoff. Each Aligned Party waives any right to require any Buyer Indemnified Party to (a) proceed against any Aligned Party; (b) proceed against any other person; or (c) pursue any other remedy whatsoever in the power of any Buyer Indemnified Party. The Buyer may, but shall not be obligated to, set off against any and all payments or shares of Buyer Stock due any Aligned Party, including any amounts or shares of Buyer Stock due to any Seller under this Agreement or any Transaction Document, any amount to which any Buyer Indemnified Party is entitled to be indemnified hereunder. Such right of set off shall be separate and apart from any and all other rights and remedies that the Buyer Indemnified Parties may have against the Aligned Parties. No consent of any Aligned Party shall be required for any assignment or reassignment of the rights of the Buyer under this Article 9.
ARTICLE 10
TERMINATION OF AGREEMENT
10.1 Termination. This Agreement and the Transactions may be terminated at any time prior to the Closing Date:
(a) By mutual consent of the Buyer and the Aligned Parties;
(b) By the Buyer or the Aligned Parties’ Representative if, despite the good faith efforts of such party, the Closing Date shall not have occurred on or before March 31, 2011, or such other date, if any, as the parties shall agree upon in writing;
(c) By the Buyer, if there has been a material violation or breach by any of the Aligned Parties of any of the covenants, agreements, representations or warranties contained in this Agreement or the Transaction Documents which has not been waived in writing, or if any of the conditions set forth in Article 7 have not been satisfied by the Closing or have not been waived in writing by the Buyer;
(d) By the Aligned Parties’ Representative, if there has been a material violation or breach by the Buyer of any of the covenants, agreements, representations or warranties contained in this Agreement or the Transaction Documents to which it is a party which has not been waived in writing, or if any of the conditions set forth in Article 8 have not been satisfied by Closing or have not been waived in writing by the Aligned Parties’ Representative; or
(e) By the Buyer or the Aligned Parties’ Representative immediately upon written notice to the other if any regulatory agency, whose approval is required for the consummation and performance of the Transactions, denies such application for approval by final order or ruling (which order or ruling shall not be considered final until expiration or waiver of all periods for review or appeal) or if the consummation or performance of the Transactions shall violate any non-appealable final order, decree or judgment of any court or governmental authority having competent jurisdiction.
10.2 Notice and Effect of Termination. On termination of this Agreement, the Transactions shall be abandoned and all continuing obligations of the parties under or in connection with this Agreement and the Transaction Documents shall be terminated and of no further force or effect; provided, however, that nothing herein shall relieve any party from liability for any misrepresentation, breach of warranty or breach of covenant contained in this Agreement or in any Transaction Document prior to such termination. Notwithstanding the foregoing, the confidentiality obligations set forth in Section 13.8 shall survive the termination of this Agreement for any reason. If this Agreement has terminated due to the breach of any party, such party shall remain liable for any damages arising from such breach.
ARTICLE 11
SURVIVAL OF REPRESENTATIONS AND WARRANTIES
11.1 Survival of Representations and Warranties. The representations and warranties contained in this Agreement shall survive the Closing, regardless of any investigation made by the Buyer or any Aligned Party prior to the Closing Date.
11.2 Equitable Remedies. In addition to any other rights or remedies available at law or in equity, upon the breach or threatened breach of any of the covenants, agreements or obligations of a party under this Agreement, the non-breaching party shall be entitled to file an action for specific performance or injunctive or other equitable relief without being required to post a bond or provide any other security.
11.3 Remedies Cumulative. The remedies provided in this Agreement shall be cumulative and shall not preclude any party from asserting any other right, or seeking any other remedies, against any other party.
ARTICLE 12
NOTICES
12.1 Required Notices. Any notices or other communications required or permitted hereunder shall be sufficiently given if sent by certified mail, postage prepaid, or delivered by hand or courier, addressed as follows:
To the Buyer:
450 N. Brand Blvd.
Suite 600
Glendale, California 91203
Attn.: Chief Executive Officer
Fax: (818) 291-6444
With a copy to:
Shartsis Friese LLP
One Maritime Plaza, 18th Floor
San Francisco, CA 94111-3598
Attn: P. Rupert Russell, Esq.
Fax: (415) 421-2922
To the Aligned Parties:
Raouf Khalil
860 Hampshire Road, Suite A
Westlake Village, CA 91361
Fax: (805) 379-0267
With a copy to:
Carl D. Hasting, Esq.
Attorney at Law
Certified Public Accountant
CDH Associates, Inc.
5655 Lindero Canyon Rd., Suite 226
Westlake Village, CA 91362
Fax: (818) 879-1562
or such other address as shall be furnished in writing by any party, and any such notice or communication shall be deemed to have been given as of the date so mailed or, if delivered by hand or courier, on the date received.
ARTICLE 13
MISCELLANEOUS
13.1 Expenses. All legal, accounting and other costs and expenses incurred by the Buyer, on the one hand, and the Aligned Parties and the Company, on the other hand, in connection with this Agreement and the Transactions, including attorneys’ fees, shall be borne by the Buyer and the Aligned Parties, respectively.
13.2 Post-Closing Cooperation. The Buyer and Aligned LLC mutually agree that they shall cooperate with each other after the Closing as may be reasonably requested with regard to services, management, administration, support services and other matters of a like nature.
13.3 Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the parties and their respective heirs, personal representative, successors and assigns.
13.4 Counterparts. This Agreement may be executed in one or more counterparts, all of which shall be considered one and the same and shall become effective when one or more counterparts have been signed by each party and delivered to the other parties.
13.5 Further Assurance. The parties hereto each agree to execute and deliver such other documents, certificates, agreements, authorizations and other writings and to take such other actions as may be necessary or desirable in order to consummate or implement expeditiously the Transactions.
13.6 Entire Agreement; Amendments. This Agreement, the Transaction Documents, and the other documents and writings referred to herein or delivered pursuant hereto contain the entire understanding of the parties with respect to its subject matter. There are no restrictions, agreements, promises, warranties, covenants or undertakings other than those expressly set forth in such documents with respect to the subject matter of this Agreement. This Agreement supersedes all prior and contemporaneous agreements and understandings, both written and oral, between the parties with respect to the subject matter hereof. This Agreement may be amended only by a written instrument duly executed by all parties hereto. Any condition to a party’s obligations hereunder may be waived but only by a written instrument signed by the party entitled to the benefits thereof
13.7 Interpretation. Each party has been represented by sophisticated counsel in this transaction and agrees that if any issue arises as to the meaning or construction of any word, phrase or provision hereof, that no party shall be entitled to the benefit of the principles of the construction and interpretation of contracts or written instruments which provide that any ambiguity is to be construed in favor of the party who did not draft the disputed word, phrase or provision.
13.8 Non-Disclosure. The parties hereby acknowledge the confidential and proprietary nature of the information set forth in this Agreement and the Transaction Documents and the confidential nature of the negotiation, preparation and execution of this Agreement and the Transaction Documents, and each party hereto, by his, her or its execution hereof, covenants and agrees to maintain strict confidentiality with respect to the negotiation, preparation, execution and existence of this Agreement and the Transaction Documents, except such disclosure as may be required in order to fulfill the obligations of any party under this Agreement or as may be required by law (including federal and state securities laws or the rules of any securities exchange) or as may be necessary to their attorneys and accountants relating to same and, as to such attorneys and accountants, to obtain similar confidentiality understandings, with such confidentiality and non-disclosure to be maintained until Closing.
13.9 Waiver. No delay or omission on the part of any party hereto in exercising any right hereunder shall operate as a waiver of such right or any other right under this Agreement or any of the Transaction Documents.
13.10 Exhibits. All Exhibits, Schedules, Annexes and documents referred to in or attached to this Agreement are integral parts of this Agreement as if fully set forth herein and all statements appearing therein shall be deemed to be representations.
13.11 Choice of Law. This Agreement shall be construed and interpreted in accordance with the laws of the State of California, without regard to the choice of law principles thereof.
13.12 Section Headings. The section headings are for reference only and shall not limit or control the meaning of any provision of this Agreement.
13.13 Severability. If any provision of this Agreement shall be held invalid under any applicable law, such invalidity shall not affect any other provision of this Agreement that can be given effect without the invalid provision, and, to this end, the provisions hereof are severable.
IN WITNESS WHEREOF, this Agreement has been executed as of the day and year first above written.
APOLLO MEDICAL HOLDINGS, INC.,
a Delaware corporation
By: Warren Hosseinion, Chief Executive Officer
ALIGNED HEALTHCARE GROUP –
CALIFORNIA, INC.,
a California professional medical corporation
By: Hany R. Khalil, President
ALIGNED HEALTHCARE GROUP LLC,
a California limited liability company
By: Marcelle Khalil, Managing Member
RAOUF KHALIL
JAMIE MCREYNOLDS, M.D.
BJ REESE
BJ REESE & ASSOCIATES, LLC
By: BJ Reese, Managing Member
"AMEH News" Apollo Medical Holdings, Inc. Announces Acquisition of Aligned Healthcare Group, LLC
http://www.tradingmarkets.com/news/press-release/ameh_amehe_apollo-medical-holdings-inc-announces-acquisition-of-aligned-healthcare-group-llc-1496098.html
GLENDALE, Calif., Feb 16, 2011 (BUSINESS WIRE) --
Apollo Medical Holdings, Inc. ("Apollo") (OTCBB: AMEH | PowerRating), a leading provider of hospitalist services to the healthcare community, today announced that it has acquired Aligned Healthcare Group LLC ("Aligned"), a provider of 24-hour physician call centers and specialized care management services to health plans, hospitals and medical groups. In exchange for a 100% ownership interest in Aligned, Apollo will issue 1,000,000 common shares to the shareholders of Aligned, and pay up to an additional 4,500,000 common shares over the next three years subject to a performance earnout based on cash flow.
Raouf Khalil, MBA, Chief Executive Officer of Aligned, was named President of Aligned Healthcare Group and will be added to the Board of Directors of Apollo Medical Holdings. In addition, Jamie McReynolds, M.D. will become Chief Medical Officer and Bette Jane Reese, RN, MHA will become Chief Operating Officer of the Aligned Division respectively.
Mr. Khalil has 23 years of experience in the healthcare industry. He began his career in banking on Wall Street. Subsequently, he founded Professional Home Health Services (PHHS), a successful home health, home infusion, hospice and durable medical equipment business. He sold PHHS to Option Care, a national home infusion company. In 2001, he co-founded Care Level Management Group LLC ("CLM"). Mr. Khalil became Chief Executive Officer of CLM and grew the company to annual revenues of more than $50 million and had more than 460 employees in five states. CLM became a real healthcare innovator by pioneering the Personal Visiting Physician (PVP) delivery system, which provided round-the-clock access to doctors for chronically ill and elderly patients. CLM was sold to Inspiris in 2008. Mr. Khalil also founded and is Chief Executive Officer of Mobile Doctors 24-7 International, which provides healthcare services in the Middle East, and founded Aligned Healthcare LLC in 2008. Mr. Khalil received an MBA from the University of Southern California in 1981.
"The combination of ApolloMed and Aligned creates a powerful multidisciplinary care management organization that coordinates care across settings," stated Warren Hosseinion, M.D., Chief Executive Officer of Apollo Medical Holdings, Inc. "The new ApolloMed integrated model provides the infrastructure to help provider groups and health plans achieve objectives for utilization efficiency, quality of care and cost control within the shared accountability arrangements that are emerging within the new world of healthcare payment reform."
"It is a pleasure to join forces with the management team of Aligned, an acknowledged leader in medical management. They have a proven track record providing scalable, patient-centered care management services for hospitals and health plans," stated Adrian Vazquez, M.D., President and Chairman of Apollo Medical Holdings, Inc. "By combining our two organizations, we will broaden our service offering to improve the quality of patient care in hospitals, post-acute care facilities and at home. It also enables us to achieve a balance between optimal length of stay and avoidance of readmissions."
"Integrating inpatient care and outpatient services as well as providing 24/7 physician access is a unique value and essential for desired clinical and financial outcomes. The Aligned portfolio of care and transition services is strengthened considerably with the addition of ApolloMed's network of hospitalists. This combination of services does not exist in the market today and is in great demand as provider entities look for solutions to improve patient care and improve performance and accountability throughout their organizations," said Raouf Khalil, MBA, President of Aligned Healthcare.
Management Bios for Bette Jane Reese, RN, MHA and Jamie McReynolds, M.D.
BJ Reese, RN, MHA brings 18 years of experience in health care management with an extensive background in care management operations, quality improvement, disease management, clinical consultative sales, account management and product implementation. Prior to joining Aligned, Ms Reese provided managed care consulting services for a variety of established and emerging health care clients on disease management, medical cost analysis, consultative sales and strategic planning for healthcare product introductions. Ms Reese served as Vice President of Account Management and Quality at Care Level Management Group LLC, where she established CLM's national account management strategy and developed standardized client reporting packages and client-specific program implementation strategies. Ms Reese started her managed care career at UnitedHealth Care in Minneapolis, where she held various corporate medical management positions for over 12 years involving development and implementation of a variety of clinical and operations programs for commercial and government-based business. Ms Reese has authored several white papers on medical management product positioning and has been a presenter at healthcare conferences on medical management issues. Prior to entering managed care, Ms Reese worked as a staff nurse in oncology, critical care and emergency/trauma. She holds a Masters in Health Administration, a mini MBA in Health Care and Quality Management, and a BA in Nursing. She received her original Diploma in Nursing in 1978 from Thomas Jefferson University in Philadelphia, PA.
Jamie McReynolds, M.D. is a clinical physician with over 25 years of experience in family practice, clinical operations and the development of new care delivery systems. As Care Level Management's Senior Vice President for Clinical Operations and Best Practices, she led the Centers for Medicare and Medicaid Services demonstration project's implementation team and provided oversight of a multidisciplinary training committee. She has extensive knowledge of payment structures for Medicare and Medicaid as well as teaching experience with physicians and physician extenders. Dr. McReynolds received her medical degree from the University of New Mexico School of Medicine and performed her residency and fellowship at St. Joseph's Hospital and Medical Center in Arizona. Dr. McReynolds has won numerous awards throughout her clinical career.
About Apollo Medical Holdings, Inc.
Apollo is a leading provider of integrated medical management services that improves the efficiency in inpatient care plus multi-disciplinary care management services targeting inefficiencies in healthcare payer and provider networks. Our integrated model combines hospitalist medicine, 24-hour physician call centers, case management and transition management that offers to help healthcare organizations engage in performance payments for utilization efficiency, quality of care objectives and shared accountability arrangements. The company intends to capitalize on the growing market for hospital-based physicians and care management services. There are 4900 acute care hospitals in the U.S., with over 35 million annual admissions. Total U.S. spending on hospital care is over $650 billion, and is expected to increase to $1.3 trillion by 2016. There are tremendous inefficiencies in the delivery of inpatient care, a high rate of hospital errors and high readmission rates. These are drivers for the growth of hospital-based medicine and care management services. Apollo and its affiliated medical groups have proven expertise in providing excellent and efficient care to hospitalized patients.
.24 I'm glad I followed you into this one 10bagger :)
AMEH.. $0.2088 To Provide Hospitalist Services
Apollo Medical Holdings, Inc. Selected to Provide Hospitalist Services at Garfield Medical Center
PR Newswire - Feb 03 at 09:00
Company Symbols: NASDAQ-OTCBB:AMEH
GLENDALE, Calif., Feb. 3, 2011 /PRNewswire/ -- Apollo Medical Holdings, Inc. (OTC Bulletin Board: AMEH), a leading provider of hospitalist services to the healthcare community, today announced that ApolloMed Hospitalists, one of its affiliated medical groups, signed a service agreement with Garfield Medical Center, an AHMC facility, to provide comprehensive inpatient care services at the 210-bed facility in Monterey Park, California. Under the agreement, ApolloMed will provide hospitalist services to support the hospital&;s new LAC-USC contract and will also be responsible for developing a specialist call panel for these patients.
&;It is an honor to have been selected by Garfield Medical Center. This agreement represents an expansion of our hospitalist services at the facility and will be supported by our existing medical staff,&; stated Warren Hosseinion, M.D., Chief Executive Officer of Apollo Medical Holdings.
&;We are very excited that ApolloMed has become Garfield Medical Center&;s partner in providing inpatient hospital services to those most in need – patients transferred in from Los Angeles County - USC Medical Center,&; stated Mr. Philip A. Cohen, Executive Vice President of AHMC Healthcare and Chief Executive Officer of Garfield Medical Center.
&;This is our third contract with AHMC Healthcare. ApolloMed currently provides hospitalist services at Greater El Monte Community Hospital and Monterey Park Hospital. AHMC has been and continues to be a great partner for us and we look forward to continuing to grow our relationship with them,&; stated Adrian Vazquez, M.D., President and Chairman of Apollo Medical Holdings, Inc.
About Apollo Medical Holdings, Inc.
Apollo is a leading provider of hospitalist services to the healthcare community in the Greater Los Angeles area. The company intends to capitalize on the growing market for hospital-based physicians, such as hospitalists, or physicians with expertise in hospital medicine. There are 4900 acute care hospitals in the U.S., with over 35 million annual admissions. Total U.S. spending on hospital care is over $650 billion, and is expected to increase to $1.3 trillion by 2016. There are tremendous inefficiencies in the delivery of inpatient care and a high rate of hospital errors. Both of these are drivers for the growth of hospital-based medicine. Apollo and its affiliated medical groups have proven expertise in providing excellent and efficient care to hospitalized patients.
To learn more about ApolloMed, please visit our website: www.apollomed.net
SOURCE Apollo Medical Holdings, Inc.
AMEH.. $0.16
GLENDALE, Calif., Dec 22, 2010 (BUSINESS WIRE) -- Apollo Medical Holdings, Inc. (AMEH, Trade ), a leading provider of hospitalist services to the healthcare community, today announced the planned retirement of Noel DeWinter, who has served as the Company's Chief Financial Officer since August 2008. Mr. DeWinter's retirement will take effect on December 31, 2010. He will work with the Company as a consultant through December 31, 2011. The company's Board of Directors has appointed Kyle Francis, who has served as Executive Vice President of Business Development and Strategy since 2008 as the new Chief Financial Officer.
"Noel has played a critical role in the Company's formation and growth during his tenure," commented Adrian Vazquez, M.D., Chairman of the Board of Directors. "On behalf of our Board and the entire ApolloMed team, I want to express our sincerest thanks to Noel for his leadership and commitment to all of the Company's stakeholders and wish him the very best in his retirement."
"We are pleased to announce the promotion of Kyle Francis, a seasoned finance executive with deep knowledge about the healthcare industry and extensive public company experience. He will provide strong and steady financial and corporate finance leadership as the Company enters into its next growth stage. We are very fortunate to have talented people like Mr. Francis to continue to build on the strong financial structure that Noel put in place."
Mr. Francis brings over 10 years of financial and transactional experience to the Company. Prior to joining Apollo, he was a member of the Healthcare Services Investment Banking Division of Oppenheimer & Co. and CIBC World Markets for 9 years. Based in New York and San Francisco, he advised public and private healthcare services companies and private equity investors on a range of growth and capital strategies, including public and private equity offerings, mergers and acquisitions, leveraged buyouts and debt financings. Prior to joining CIBC World Markets, Mr. Francis worked at Enron Corporation in Houston, Texas.
Mr. Francis holds a Bachelor of Commerce, major in finance and accounting degree from McGill University, where he graduated with Great Distinction.
About Apollo Medical Holdings, Inc.
Apollo is a leading provider of hospitalist services to the healthcare community in the Greater Los Angeles area. The company intends to capitalize on the growing market for hospital-based physicians, such as hospitalists, or physicians with expertise in hospital medicine. There are 4900 acute care hospitals in the U.S., with over 35 million annual admissions. Total U.S. spending on hospital care is over $650 billion, and is expected to increase to $1.3 trillion by 2016. There are tremendous inefficiencies in the delivery of inpatient care and a high rate of hospital errors. Both of these are drivers for the growth of hospital-based medicine. Apollo and its affiliated medical groups have proven expertise in providing excellent and efficient care to hospitalized patients.
To learn more about ApolloMed, please visit our website: www.apollomed.net .
SOURCE: Apollo Medical Holdings, Inc.
Apollo Medical Holdings, Inc.
Warren Hosseinion, 818-396-8050
AMEH.. $0.1788.. NEW HIGH !!!!!!!!!
10Q and the I-box is updated.. hank
Another period of growth and positive cash flow.. New hospitals and hires consume cash flow but,, the base of renewable sales and penetration into the hospital field continues.. AMEH is /continues to create a nitch in the new reality of hospital admin.. of shared medical professionals necessary for everyday emergencys that arise.. Each Qtr. has demonstrated growth within this particular nitch and IMO it will not decrease anytime in the near future.. AMEH is a hold and mold investment Opp. that has the possibility of becoming a 100 bagger from this level.. hank
APOLLO MEDICAL HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
October 31, 2010 January 31, 2010
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 501,639 $ 665,737
Accounts receivable, net 643,107 457,517
Receivable from officers 8,616 23,483
Due from affiliate 3,900 2,850
Prepaid expenses 46,235 30,165
Total current assets 1,203,497 1,179,752
Deferred commission cost, net 85,938 114,063
Property and equipment, net 7,865 11,627
TOTAL ASSETS $ 1,297,300 $ 1,305,442
LIABILITIES AND STOCKHOLDERS' DEFICIT
CURRENT LIABILITIES:
Accounts payable and accrued liabilities $ 150,116 $ 104,252
Total current liabilities 150,116 104,252
Convertible notes, net 1,248,186 1,247,582
Total liabilities 1,398,302 1,351,834
STOCKHOLDERS' DEFICIT:
Preferred stock, par value $0.001 ;
5,000,000 shares authorized; none issued - -
Common Stock, par value $0.001; 100,000,000 shares authorized,
27,635,774 and 27,041,328 shares issued and outstanding
as of October 31, 2010 and January 31, 2010 27,636 27,041
Additional paid-in-capital 986,266 939,483
Accumulated deficit (1,343,019 ) (1,241,031 )
Total (329,117 ) (274,507 )
Non-controlling interest 228,115 228,115
Total stockholders' deficit (101,002 ) (46,392 )
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 1,297,300 $ 1,305,442
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
3
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APOLLO MEDICAL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND NINE MONTH PERIODS ENDED OCTOBER 31, 2010 AND 2009
(UNAUDITED)
For the Three Month Periods Ended For the Nine Month Periods Ended
October 31, October 31,
2010 2009 2010 2009
NET REVENUE $ 1,019,078 $ 616,975 $ 2,861,658 $ 1,699,100
COST OF REVENUE 868,119 455,183 2,407,524 1,262,430
GROSS PROFIT 150,959 161,792 454,134 436,670
Operating expenses:
General and administrative 152,013 139,557 427,720 434,225
Depreciation 2,330 9,622 8,330 30,297
Total operating expenses 154,343 149,179 436,050 464,522
INCOME/(LOSS) FROM OPERATIONS (3,384 ) 12,613 18,084 (27,852 )
OTHER INCOME/(EXPENSES):
Interest expense (31,748 ) (15,738 ) (94,736 ) (25,546 )
Financing cost (9,375 ) (25,000 ) (28,125 ) (25,000 )
Other income 4,292 - 4,389 -
Total other expenses (36,831 ) (40,738 ) (118,472 ) (50,546 )
LOSS BEFORE INCOME TAXES (40,215 ) (28,125 ) (100,388 ) (78,398 )
Provision for Income Tax 800 800 1,600 1,600
NET LOSS $ (41,015 ) $ (28,925 ) $ (101,988 ) $ (79,998 )
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING,
BASIC AND DILUTED 27,635,774 26,805,493 27,370,367 26,260,574
*BASIC AND DILUTED NET LOSS PER SHARE $ (0.00 ) $ (0.00 ) $ (0.00 ) $ (0.00 )
*Weighted average number of shares used to compute basic and diluted loss per share is the same since the effect of dilutive securities is anti-dilutive.
AMEH.. $01788 New High..
If you look at my posts on AMEH you will notice I've been here a long time.. This is a great story with growth.. Profit margins are spent on growth but now that they are a critical mass I believe that the next report will show profirts.. In any case I'm in this one for the long haul.. hank
Is that chart telling you something, or you just like the new highs? I like .18 we hit today.
This is the AMEH board.. Post what ever you want on AMEH.. hank
Hank, I couldn't respond to your PM. Can I respond to it here?
AMEH.. $0.12 Sharing the wealth..
APOLLO MEDICAL HOLDINGS, INC.
450 North Brand Boulevard, Suite 600
Glendale, California 91203
__________________________________________________________
IMPORTANT NOTICE REGARDING THE AVAILABILITY OF AN INFORMATION STATEMENT PERTAINING TO ACTION BY WRITTEN CONSENT OF STOCKHOLDERS ON MARCH 4, 2010
Dear Stockholders:
This notice is being sent to the stockholders of record of Apollo Medical Holdings, Inc. as of March 4, 2010 to inform them that the Board of Directors and stockholders of Apollo Medical Holdings, Inc. have approved and adopted a 2010 Equity Incentive Plan.
The Information Statement relating to this written consent is available on the Internet at www.apollomed.net. This communication presents only an overview of the more complete information statement that is available to you on the Internet. We encourage you to access and review all of the important information contained in these materials.
On March 4, 2010, the members of our Board of Directors, Warren Hosseinion, M.D., Adrian Vazquez, M.D., and Suresh Nihalani, approved the 2010 Equity Incentive Plan both in their capacities as members of the Board of Directors and as stockholders. The members of our Board of Directors held an aggregate of approximately 67% of our outstanding common stock on the record date. These consents constitute the only stockholder approval required for the approval of the 2010 Equity Incentive Plan under Delaware corporate law and our Certificate of Incorporation and Bylaws, as currently in effect. Pursuant to Rule 14c-2 of the Securities Exchange Act, as amended, and Delaware corporate law, we are distributing this notice to our stockholders who did not execute a written consent to approve the 2010 Equity Incentive Plan, and the approval of the 2010 Equity Incentive Plan will not become effective until August 23, 2010, which is 41 calendar days after the date we first mailed to our stockholders this notice regarding the Internet availability of an Information Statement.
WE ARE NOT ASKING YOU FOR A PROXY AND YOU ARE REQUESTED NOT TO SEND US A PROXY.
How to Access the Information Statement
The Information Statement is available online at: www.apollomed.net
If you want to receive a paper or e-mail copy of this document, you must request one. There is no charge to you for requesting a copy. Please make your request for a copy as instructed below on or before August 6, 2010 to facilitate timely delivery.
TO REQUEST A PAPER OR E-MAIL COPY OF THESE MATERIALS:
1. Call Apollo Medical Holdings, Inc. at (877) 340-3290
2. Visit our website at www.apollomed.net
3. Send us an email at ir@apollomed.net Please clearly state the name and mailing address or email address to which the material should be sent.
By Order of the Board of Directors,
By: /s/ WARREN HOSSEINION
Warren Hosseinion
Chief Executive Officer
July 13, 2010
AMEH.. $0.12 Shares..??
ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS, COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.
On July 16, 2010, Apollo Medical Holdings, Inc. (the “Company”) and Suresh Nihalani, a member of the Company’s Board of Directors, entered into an amendment (the “Amendment”) to that certain Board of Directors Agreement (the “Director Agreement”), dated October 27, 2008, between the Company and Mr. Nihalani. The Director Agreement is described in greater detail in the Company’s current report on Form 8-K filed on November 5, 2008.
Pursuant to the Director Agreement, Mr. Nihalani was to receive in exchange for his services as a director 400,000 shares of common stock (“Common Stock”) of the Company, which was to be held in escrow until released by the Company in 36 equal monthly installments. In lieu of such arrangement, the Company has been issuing shares of Common Stock to Mr. Nihalani in an amount equal to approximately 11,111 shares on a monthly basis, and Mr. Nihalani has agreed to such arrangement. To date, Mr. Nihalani has been issued 188,887 shares of Common Stock pursuant to these issuances.
Pursuant to the Amendment, Mr. Nihalani was issued 211,113 shares (the “Restricted Shares”), representing the 400,000 shares of Common Stock he was to receive under the Director’s Agreement less the 188,887 shares of Common Stock he has already received, in exchange for $.001 per share, the par value of each share. The Restricted Shares will be subject to repurchase by the Company at par value in the event that Mr. Nihalani no longer serves as a member of the Board of Directors of the Company, provided that Mr. Nihalani will become vested in such shares and such repurchase rights will lapse as to approximately 11,111 of the Restricted Shares each month. Mr. Nihalani may not transfer, assign, encumber or otherwise dispose of any of the Restricted Shares until such Restricted Shares are vested, and any disposition will be subject to applicable securities law.
The Amendment also amends and restates the form of Indemnification Agreement to be entered into between the Company and Mr. Nihalani. The Company and Mr. Nihalani executed the Indemnification Agreement on July 16, 2010. The Indemnification Agreement provides, among other things, that the Company will indemnify Mr. Nihalani, under the circumstances set forth therein, for defense expenses, damages, judgments, fines and settlements incurred by him in connection with actions or proceedings to which he may be a party as a result of his position as a director, officer, employee, agent or fiduciary of the Company, and otherwise to the full extent permitted under the Company’s bylaws and state law.
The preceding summary is subject to, and qualified by, the full text of the Amendment, which is filed as exhibits to this Current Report on Form 8-K.
Dear BIG 10:
Good move! I believe AMEH near term potential is capped by challenges such as cost of services,SG&A,...... for some times in the future,including the quality of A/R even without a major austerity in the CA health care industry,which is also a BIG IF!
AMEH..$0.14
Showing life.. Sold 50000 on a scale..
09/29/10 12:35 PM EDT Sell 7224 AMEH Executed @ $0.14 Details | Edit
09/29/10 12:34 PM EDT Sell 2776 AMEH Executed @ $0.1299 Details | Edit
09/29/10 12:34 PM EDT Sell 3888 AMEH Executed @ $0.1188 Details | Edit
09/29/10 12:34 PM EDT Sell 16112 AMEH Executed @ $0.1188 Details | Edit
09/29/10 12:33 PM EDT Sell 20000 AMEH Executed @ $0.1128 Details | Edit
AMEH.. $0.10 July 31 10Q..
APOLLO MEDICAL HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
As of July 31,
2010 As of January 31,
2010
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 534,332 $ 665,737
Accounts receivable, net 622,734 457,517
Receivable from officers 23,664 23,483
Due from affiliate 3,650 2,850
Prepaid expenses 12,567 30,165
Total current assets 1,196,947 1,179,752
Prepaid commssion cost 95,312 114,063
Property and equipment - net 10,196 11,627
TOTAL ASSETS $ 1,302,455 $ 1,305,442
LIABILITIES AND STOCKHOLDERS' DEFICIT:
CURRENT LIABILITIES:
Accounts payable and accrued liabilities $ 114,457 $ 104,252
Total current liabilities 114,457 104,252
Convertible notes, net 1,247,985 1,247,582
Total liabilities 1,362,442 1,351,834
STOCKHOLDERS' DEFICIT:
Preferred stock, par value $0.001 ;
5,000,000 shares authorized; none issued - -
Common Stock, par value $0.001; 100,000,000 shares authorized,
27,635,774 and 27,041,328 shares issued and outstanding
as on July 31, 2010 and January 31, 2010 27,636 27,041
Additional paid-in-capital 986,266 939,483
Accumulated deficit (1,302,004 ) (1,241,031 )
Total (288,102 ) (274,507 )
Non-controlling interest 228,115 228,115
Total stockholders' deficit (59,987 ) (46,392 )
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $ 1,302,455 $ 1,305,442
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
3
--------------------------------------------------------------------------------
APOLLO MEDICAL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND SIX MONTHS ENDED JULY 31, 2010 AND 2009
(UNAUDITED)
For the Three Months ended For the Six Months ended
July 31, July 31,
2010 2009 2010 2009
REVENUES $ 1,039,695 $ 580,942 $ 1,842,580 $ 1,082,125
COST OF SERVICES 864,719 387,692 1,539,405 807,247
GROSS REVENUE 174,976 193,250 303,175 274,878
Operating expenses:
General and administrative 190,516 122,105 275,708 294,668
Depreciation 2,993 10,338 5,999 20,675
Total operating expenses 193,509 132,443 281,707 315,343
PROFIT/(LOSS) FROM OPERATIONS (18,533 ) 60,807 21,468 (40,465 )
OTHER EXPENSES:
Interest expense 31,465 4,958 62,988 9,807
Financing cost 9,375 - 18,750 -
Other expense 757 - (97 ) -
Total other expenses 41,597 4,958 81,641 9,807
INCOME/(LOSS) BEFORE INCOME TAXES (60,130 ) 55,849 (60,173 ) (50,272 )
Provision for income tax - - 800 800
NET INCOME/(LOSS) $ (60,130 ) $ 55,849 $ (60,973 ) $ (51,072 )
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING, BASIC AND DILUTED 27,452,197 26,096,306 27,342,771 25,985,136
*BASIC AND DILUTED NET INCOME/(LOSS) PER SHARE $ (0.00 ) $ 0.00 $ (0.00 ) $ (0.00 )
*Weighted average number of shares used to compute basic and diluted loss per share is the same since the effect of dilutive securities is anti-dilutive.
AMEH.. $0.0928.. Results of Operations and Operating Data
My take on this report is that AMEH is close to getting to critical mass from which earnings will start going to the bottom line.. Management has indicated thier confidence by converting a portion of thier debt and have in the past qtr. issued wts. to purchase stock at current prices.. The growh is rapid as are the costs that appear to be part of the growth.. While not carried as one time startup costs,, it is my opinion that each new contract has costs which will not be there on a continuing basis.. Cash burn has remained low and additional financing seems unlikely.. All in all a good report and I am egar to see the next one.. I will call the company sometime again this week and will report any findings.. hank
---------------------------
Three Months Ended July 31, 2010 vs. Three Months Ended July 31, 2009
Apollo reported net revenues of $1,039,695 for the three months ended July 31, 2010, compared to net revenues of $580,942 for the comparable three month period ended July 2009. The revenue increase of $458,753, or 79%, was attributable to new hospital contracts, increased same-market area growth and expansion of services with existing medical group clients at new hospitals. Net revenues are comprised of net billings by AMH under the various fee structures from health plans, medical groups/IPA’s and hospitals, and income from service fee agreements.
Physician practice salaries, benefits and other expenses for the three months ended July 31, 2010 were $864,719, at 83% of net revenues, compared to $387,692 for the three months ended July 31, 2009, at 67% of net revenues. Cost of Services includes the payroll and consulting costs of the physicians, all payroll related costs, costs for all medical malpractice insurance and physician privileges. The increase in physician costs were attributable to start-up losses at new hospital contracts and expansions of services at new hospitals in the quarter.
General and administrative expenses include all salaries, benefits, supplies and operating expenses, not specifically related to the day-to-day operations of our physician group practices, including billing and collections functions, and our corporate management and overhead. General and administrative expenses were $190,516, at 18% of net revenues, for the three months ended July 31, 2010, higher by $68,411 from General and Administrative expenses of $122,105 for the three months ended July 31, 2009, at 21% of net revenues. In the second quarter of 2010, the Company recorded bad debt expense of $25,700 compared to bad debt expense of $1,791in the second quarter of 2009. Legal fees in the second quarter of 2010 of $26,775 compared to legal fees of $10,610. In addition, Apollo recorded an expense of $17,100 related to shares issued to a director, and incurred higher rent, audit and public company costs.
Depreciation and amortization expense was $2,993 for the three months ended July 31, 2010, and $10,338 for the comparable three-month period in 2009.
The Company reported a loss from operations of $18,533 for the three months ended July 31, 2010, compared to a profit from operations of $60,807 recorded in the same period of 2009. Although net revenues in 2010 continued to benefit from the addition of contracts with hospitals and the hiring of several additional physicians, the higher cost of services as a percent of revenue, 84% in the quarter just ended versus 67% in the second quarter of 2009, impeded the operating results.
Interest expense and amortization of financing costs totaled $40,840 for the three months ended July 31, 2010, compared to interest and financing costs of $4,958 in the three months ended July 31, 2009. Interest expense and financing costs in 2010 included interest on the subordinated borrowings of $31,250, and the amortization of financing costs of $9,375, related to these notes. Interest expense in the three months ended July 31, 2009 of $4,958 represents interest expense paid on the SBA loan with Wells Fargo Bank, interest expense on convertible notes and interest expense accrued at AMM for related party notes.
A net loss of $60,130 was reported for the three months ended July 31, 2010, compared to a net income of $55,849 for the three months ended July 31, 2009. The factors contributing to the net loss in the current quarter compared to the net income in the quarter ended July 2009 are discussed above.
--------------------------------
Six Months Ended July 31, 2010 vs. Six Months Ended July 31, 2009
Net revenues for the six months ended July 31, 2010 of $1,842,580 increased $760,455, or 70 percent, over net revenues of $1,082,125 reported for the six months ended July 31, 2009. Net revenues are comprised of net billings by AMH under the various fee structures from health plans, medical groups/IPA’s and hospitals, and income from service fee agreements. The increase was attributable to new hospital contracts, increased same-market area growth and expansion of services with existing medical group clients at new hospitals.
Physician practice salaries, benefits and other expenses for the six months ended July 31, 2010 were $1,539,405, at 84% of net revenues, compared to $807,247 , at 75% of net revenues, for the six months ended July310, 2009. Cost of Services includes the payroll and consulting costs of the physicians, all payroll related costs, costs for all medical malpractice insurance and physician privileges. The increase in physician costs was attributable to start-up losses on new hospital contracts and expansions of services at new hospitals in the quarter.
General and administrative expenses include all salaries, benefits, supplies and operating expenses, not specifically related to the day-to-day operations of our physician group practices, including billing and collections functions, and our corporate management and overhead. General and administrative expenses were $275,708, at 15% of net revenues, for the six months ended July 31, 2010. General and Administrative expenses were $294,668 for the six months ended July 31, 2009, at 27% of net revenues. In the six months ended July 2010, the Company recorded non-cash compensation expenses of $47,378, related to the issuance of shares for service, lower than the $95,167 of such non-cash costs in the first six months of 2009. Also, the Company recorded a reduction in bad debt expense of $64,566 in the six month period ended July 2010. The Company incurred higher legal fees, rent and consulting fees which partially offset the above two favorable factors. Depreciation and amortization expense was $5,999 for the six months ended July 31, 2010, and $20,675 for the comparable six-month period in 2009.
The Company reported a profit from operations of $21,468 for the six months ended July 31, 2010, compared to a loss from operations of $40,465 recorded in the same period of 2009. Net revenues in 2010 continued to benefit from the addition of contracts with hospitals and the hiring of several additional physicians. In addition, the operating profit in 2010 benefitted from the lower non-cash compensation costs and a favorable adjustment to bad debt expense.
Interest expense and the amortization of financing costs totaled $81,738 for the six months ended July 31, 2010, compared to interest and financing costs of $9,807 in the six months ended July 31, 2009. Interest expense and financing costs in 2010 included interest on the subordinated borrowings of $62,500, and the amortization of financing costs of $18,750, related to these notes. Interest expense in the six months ended July 31, 2009 of $9,807 included interest on the convertible notes, interest expense paid on the SBA loan with Wells Fargo Bank, and interest expense accrued at AMM for the related party notes.
Apollo reported a net loss of $60,973 for the six months ended July 31, 2010, compared to a net loss of $51,072 for the six months ended July 31, 2009. The reduction in the net loss was the result of the factors discussed above.
Liquidity and Capital Resources
At July 31, 2010, the Company had cash and cash equivalents of $534,332, compared to cash and cash equivalents of $665,737 at January 31, 2010. The cash balance at July 31, 2010 included $487,647 in a money market brokerage account. There were no short-term borrowings at July 31, 2010 or January 31, 2010. Long-term borrowings totaled $1,247,985 as of July 31, 2010 and $1,247,582 on January 31, 2010.
10-Q out
Nice increase in top line, but COGS increased 20% as a portion of revenues. Recorded a small loss for the Quarter. The company stated that the increased costs were part of startup at new hospitals, and hopefully I'm not reading too much into it but I hope that means that the COGS will drift back to the 60-70% of revs of last year.
APOLLO MEDICAL HOLDINGS, INC.
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
As of July 31,
2010 As of January 31,
2010
ASSETS
CURRENT ASSETS
Cash and cash equivalents $534,332 $665,737
Accounts receivable, net 622,734 457,517
Receivable from officers 23,664 23,483
Due from affiliate 3,650 2,850
Prepaid expenses 12,567 30,165
Total current assets 1,196,947 1,179,752
Prepaid commssion cost 95,312 114,063
Property and equipment - net 10,196 11,627
TOTAL ASSETS $1,302,455 $1,305,442
LIABILITIES AND STOCKHOLDERS' DEFICIT:
CURRENT LIABILITIES:
Accounts payable and accrued liabilities $114,457 $104,252
Total current liabilities 114,457 104,252
Convertible notes, net 1,247,985 1,247,582
Total liabilities 1,362,442 1,351,834
STOCKHOLDERS' DEFICIT:
Preferred stock, par value $0.001 ;
5,000,000 shares authorized; none issued - -
Common Stock, par value $0.001; 100,000,000 shares authorized,
27,635,774 and 27,041,328 shares issued and outstanding
as on July 31, 2010 and January 31, 2010 27,636 27,041
Additional paid-in-capital 986,266 939,483
Accumulated deficit (1,302,004) (1,241,031)
Total (288,102) (274,507)
Non-controlling interest 228,115 228,115
Total stockholders' deficit (59,987) (46,392)
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT $1,302,455 $1,305,442
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
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APOLLO MEDICAL HOLDINGS, INC.
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE MONTHS AND SIX MONTHS ENDED JULY 31, 2010 AND 2009
(UNAUDITED)
For the Three Months ended For the Six Months ended
July 31, July 31,
2010 2009 2010 2009
REVENUES $1,039,695 $580,942 $1,842,580 $1,082,125
COST OF SERVICES 864,719 387,692 1,539,405 807,247
GROSS REVENUE 174,976 193,250 303,175 274,878
Operating expenses:
General and administrative 190,516 122,105 275,708 294,668
Depreciation 2,993 10,338 5,999 20,675
Total operating expenses 193,509 132,443 281,707 315,343
PROFIT/(LOSS) FROM OPERATIONS (18,533) 60,807 21,468 (40,465)
OTHER EXPENSES:
Interest expense 31,465 4,958 62,988 9,807
Financing cost 9,375 - 18,750 -
Other expense 757 - (97) -
Total other expenses 41,597 4,958 81,641 9,807
INCOME/(LOSS) BEFORE INCOME TAXES (60,130) 55,849 (60,173) (50,272)
Provision for income tax - - 800 800
NET INCOME/(LOSS) $(60,130) $55,849 $(60,973) $(51,072)
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING, BASIC AND DILUTED 27,452,197 26,096,306 27,342,771 25,985,136
*BASIC AND DILUTED NET INCOME/(LOSS) PER SHARE $(0.00) $0.00 $(0.00) $(0.00)
*Weighted average number of shares used to compute basic and diluted loss per share is the same since the effect of dilutive securities is anti-dilutive.
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
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APOLLO MEDICAL HOLDINGS, INC.
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE SIX MONTH PERIODS ENDED JULY 31, 2010 AND 2009
(UNAUDITED)
Six month periods ended July 31,
2010 2009
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss $(60,973) $(51,072)
Adjustments to reconcile net loss to net cash used in operating activities:
Depreciation 5,999 20,675
Bad debt expense (64,566) 2,253
Issuance of shares for services 47,167 95,167
Amortization of prepaid commsion cost 18,750 -
Amortization of debt discount 403 -
Changes in assets and liabilities:
Accounts receivable (100,650) (77,567)
Receivable from officers (181)
Prepaid financing cost - -
Prepaid expenses 17,599 11,718
Deferred compensation - 22,000
Accounts payable and accrued liabilities 10,205 (9,944)
Net cash provided by/(used in) operating activities (126,248) 13,230
CASH FLOWS FROM INVESTING ACTIVITIES:
Property and equipment (4,568) -
Due from related parties (800) -
Net cash used in investing activities (5,368) -
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from shares issued 211 -
Payments of notes payable - (18,741)
Proceeds from business line - 12,087
Net cash used in financing activities 211 (6,654)
NET INCREASE/(DECREASE) IN CASH & CASH EQUIVALENTS (131,405) 6,576
CASH & CASH EQUIVALENTS, BEGINNING BALANCE 665,737 84,161
CASH & CASH EQUIVALENTS, ENDING BALANCE $534,332 $90,737
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION
Interest paid during the six month period $62,586 $5,061
Taxes paid during the six month period 1,600 1,600
Conversion of notes payable to equity $- $200,000
The accompanying notes are an integral part of these unaudited condensed consolidated financial statements
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APOLLO MEDICAL HOLDINGS, INC.
NOTES TO UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS
1. Description of Business
Apollo Medical Holdings, Inc. (“Apollo” or the “Company”) is a leading provider of hospitalist services in the Greater Los Angeles, California area. Hospitalist medicine is organized around the admission and care of patients in an inpatient facility such as a hospital or skilled nursing facility and is focused on providing, managing and coordinating the care of hospitalized patients. Apollo Medical Holdings, Inc. operates as a medical management holding company that focuses on managing the provision of hospital-based medicine through a wholly owned subsidiary-management company, Apollo Medical Management, Inc. (“AMM”). Through AMM, the Company manages affiliated medical groups, which presently consist of ApolloMed Hospitalists (“AMH”) and Apollo Medical Associates (“AMA”). AMM operates as a Physician Practice Management Company (“PPM”) and is in the business of providing management services to Physician Practice Companies (“PPC”) under Management Service Agreements.
2. Summary of Significant Accounting Policies
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements have been prepared by Apollo in accordance with U.S. generally accepted accounting principles for interim financial statements. The statements consist solely of the management company, Apollo Medical Holdings, Inc. prior to August 1, 2008. Commencing with the Company’s third quarter on August 1, 2008, and concurrent with the execution of the Management Services Agreement, the statements reflect the consolidation of AMM and AMH, in accordance with EITF 97-2, Application of FASB Statement No. 94 and APB Opinion No. 16 to Physician Management Entities and Certain Other Entities with Contractual Management Agreements. In management’s opinion, all adjustments, consisting of normal recurring adjustments necessary for the fair presentation of the results of the interim periods are reflected herein. Operating results for the six month period ended July 31, 2010 are not necessarily indicative of future financial results.
The condensed consolidated financial statements and notes are presented as permitted by Form 10-Q and do not contain all of the information that is included in the annual financial statements and notes of the Company. The condensed consolidated financial statements and notes presented herein should be read in conjunction with the financial statements and notes included in the Company’s Annual Report on Form 10-K for the year ended January 31, 2010.
Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period.
Reclassification
Certain comparative amounts have been reclassified to conform to the six month periods ended July 31, 2010 and 2009.
Fair Value of Financial Instruments
Statement of financial accounting standard No. 107(ASC 825), Disclosures about fair value of financial instruments, requires that the Company disclose estimated fair values of financial instruments. The carrying amounts reported in the statements of financial position for assets and liabilities qualifying as financial instruments are a reasonable estimate of fair value.
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Credit and Supply Risk
The Company’s case rate and capitation revenues, reported by Apollo’s affiliate, AMH, are governed by contractual agreements with medical groups/IPA’s and hospitals. As a result, receivables from this business are generally fully collected. The Company does face issues related to the timing of these collections, and the Company must assess the level of earned but uncollected revenue to which it is entitled at each period end. The Company does face collection issues with regard to its fee-for-service revenues. One is the estimation of the amount to be received from each billing since the Company invoices on a Medicare schedule and each of many providers remits payment on a reduced schedule. The Company has to estimate the amount it will ultimately receive from each billing and properly record revenue. One contract with our clients provides 30 percent of reported revenues.
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Recently Issued Accounting Pronouncements
In January 2010, FASB issued ASU No. 2010-06 – Improving Disclosures about Fair Value Measurements. This update provides amendments to Subtopic 820-10 that requires new disclosure as follows: 1) Transfers in and out of Levels 1 and 2. A reporting entity should disclose separately the amounts of significant transfers in and out of Level 1 and Level 2 fair value measurements and describe the reasons for the transfers. 2) Activity in Level 3 fair value measurements. In the reconciliation for fair value measurements using significant unobservable inputs (Level 3), a reporting entity should present separately information about purchases, sales, issuances, and settlements (that is, on a gross basis rather than as one net number). This update provides amendments to Subtopic 820-10 that clarifies existing disclosures as follows: 1) Level of disaggregation. A reporting entity should provide fair value measurement disclosures for each class of assets and liabilities. A class is often a subset of assets or liabilities within a line item in the statement of financial position. A reporting entity needs to use judgment in determining the appropriate classes of assets and liabilities. 2) Disclosures about inputs and valuation techniques. A reporting entity should provide disclosures about the valuation techniques and inputs used to measure fair value for both recurring and nonrecurring fair value measurements. Those disclosures are required for fair value measurements that fall in either Level 2 or Level 3. The new disclosures and clarifications of existing disclosures are effective for interim and annual reporting periods beginning after December 15, 2009, except for the disclosures about purchases, sales, issuances, and settlements in the roll forward of activity in Level 3 fair value measurements. These disclosures are effective for fiscal years beginning after December 15, 2010, and for interim periods within those fiscal years. The Company is currently evaluating the impact of this ASU, however, the Company does not expect the adoption of this ASU to have a material impact on its consolidated financial statements.
In February 2010, FASB issued ASU No. 2010-9 –Amendments to Certain Recognition and Disclosure Requirements. This update addresses certain implementation issues related to an entity’s requirement to perform and disclose subsequent-events procedures, removes the requirement that public companies disclose the date of their financial statements in both issued and revised financial statements. According to the FASB, the revised statements include those that have been changed to correct an error or conform to a retrospective application of U.S. GAAP. The amendment is effective for interim and annual reporting periods in fiscal year ending after June 15, 2010. The Company does not expect the adoption of this ASU to have a material impact on the Company’s consolidated financial statements.
In April 2010, The FASB issued ASU No. 2010-17, Revenue Recognition – Milestone Method (Topic 605), to provide guidance on the criteria that should be met for determining whether the milestone method of revenue recognition is appropriate. The amendments in the update are effective on a prospective basis for milestones achieved for fiscal years, and interim periods within those years, beginning on or after June 15, 2010. Early adoption is permitted. The Company is currently assessing the future impact of this new accounting update to its financial statements.
Stock-based compensation
On October 17, 2006 the Company adopted SFAS No. 123R (ASC 718), “Share-Based Payment, an Amendment of FASB Statement No. 123.” As of the date of this report the Company has no stock based incentive plan in effect.
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Basic and Diluted Earnings Per Share
Earnings per share is calculated in accordance with the Statement of financial accounting standards No. 128 (SFAS No. 128, ASC 260), “Earnings per share”. SFAS No. 128 superseded Accounting Principles Board Opinion No.15 (APB 15). Net income (loss) per share for all periods presented has been restated to reflect the adoption of SFAS No. 128. Basic net income per share is based upon the weighted average number of common shares outstanding. Diluted net income (loss) per share is based on the assumption that all dilutive convertible shares and stock options were converted or exercised. Dilution is computed by applying the treasury stock method. Under this method, options and warrants are assumed to be exercised at the beginning of the period (or at the time of issuance, if later), and as if funds obtained thereby were used to purchase common stock at the average market price during the period.
Cash and Cash Equivalents
Cash and cash equivalents at July 31, 2010 was $534,332 and included cash in bank representing the Company’s current operating account and $487,647 in a brokerage money market account. The $46,685 balance in the Company's operating account is insured by the FDIC.
Revenue Recognition
The Company recognizes Case Rate, Hourly and Capitation revenue when persuasive evidence of an arrangement exists, service has been rendered, the service rate is fixed or determinable, and collection is reasonable assured. Fee for Service revenues are recorded at amounts reasonably assured to be collected. The determination of reasonably assured collections is based on historical Fee for Service collections as a percent of billings. The provisions are adjusted to reflect actual collections in subsequent periods.
The estimation and the reporting of patient responsibility revenues is highly subjective and depends on the payer mix, contractual reimbursement rates, collection experiences, judgment and other factors. The Company’s fee arrangements are with various payers, including managed care organizations, hospitals, insurance companies, individuals, Medicare and Medicaid.
3. Uncertainty of ability to continue as a going concern
The Company's financial statements are prepared using the generally accepted accounting principles applicable to a going concern, which contemplates the realization of assets and liquidation of liabilities in the normal course of business. However, the Company has an accumulated deficit of $1,302,004 as of July 31, 2010. Net Cash Flow used by Operating Activities for the six months ended July 31, 2010 was $126,248.
The financial statements do not include any adjustments relating to the recoverability and classification of liabilities that might be necessary should the Company be unable to continue as a going concern.
To date the Company has funded its operations from both internally generated cash flow and external sources, and the proceeds available from the private placement provide funds for near-term operations and growth. The Company will pursue additional external capitalization opportunities, as necessary, to fund its long-term goals and objectives.
4. Accounts Receivable
Accounts Receivable is stated at the amount management expects to collect from outstanding balances. An allowance for doubtful accounts is provided for those accounts receivable considered to be uncollectible, based upon historical experience and management's evaluation of outstanding accounts receivable at each quarter end. As of July 31, 2010, Accounts Receivable totals $622,734, net of a provision for bad debt expense of $46,410, and represents amounts invoiced by AMH. Accounts Receivable was $457,517, net of the provision for bad debt expense of $110,976, on January 31, 2010.
5. Other Receivables
Other receivables total $23,664 and $23,483 at July 31, 2010 and January 31, 2010, respectively, and represent amounts due the Company from two officers. The balances were interest free, unsecured and due on demand.
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6. Due from affiliate
Due from affiliate totals $3,650 and $2,850 as of July 31, 2010 and January 31, 2010, respectively, and represents amounts due from AMA, an unconsolidated Affiliate of the Company.
7. Prepaid Expenses
Prepaid Expenses of $12,567 and $30,165 as of July 31, 2010 and January 31, 2010, respectively, are amounts prepaid for medical malpractice insurance and Director’s and Officer’s insurance.
8. Prepaid Commission Cost
Unamortized financing cost of $95,312 on July 31, 2010 and $114,063 as of January 31, 2010 represent the financing cost associated with 10% Senior Subordinated Callable Convertible Notes due January 31, 2013, $125,000 paid by the Company on the closing of the placement on October 16, 2009 (see Note 11).
9. Property and Equipment
Property and Equipment consists of the following as of :
July 31, 2010 January 31,
2010
Website $ 4,568 $
Computers 13,912 13,912
Software 138,443 138,443
Machinery and equipment 50,815 50,815
Gross Property and Equipment 207,738 203,170
Less accumulated depreciation (197,542) (191,543)
Net Property and Equipment $10,196 $11,627
The Company had no Capital Expenditures in the quarter ended July 31, 2010. Capital expenditures totaled $4,568 at AMM in the quarter ended April 30, 2010 for the development of a Company web site.
Depreciation expense was $2,993 and $10,338 for the three month periods ended July 31, 2010 and 2009, respectively. Depreciation expense was $5,999 and $20,675 for the six month periods ended July 31, 2010 and 2009, respectively.
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10. Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities consist of the following as of:
July 31,
2010 January 31,
2010
Accounts payable $76,875 $32,460
D&O insurance payable 8,210
Accrued professional fees 15,575 22,141
Accrued payroll and income taxes 22,007 41,441
Total $114,457 $104,252
11. Long-term Debt
The Company’s long-term debt consisted of the following at July 31, 2010 and January 31, 2010
July 31, January 30,
2010 2010
Subordinated Borrowings:
10% Senior Subordinated Convertible Notes due January 31, 2013 $1,247,985 $1,247,582
Total long-term debt $1,247,985 $1,247,582
Less: Current Portion _ _
Total $1,247,985 $1,247,582
Subordinated Borrowings
10% Senior Subordinated Callable Convertible Notes due January 31, 2013
On October 16, 2009, the Company issued $1,250,000 of its 10% Senior Subordinated Callable Convertible Notes. The net proceeds of $1,100,000 will be used for the repayment of existing debt, acquisitions, physician recruitment and other general corporate purposes. The notes bear interest at a rate of 10% annually, payable semi annually on January 31 and July 31. The Notes mature and become due and payable on January 31, 2013 and rank senior to all other unsecured debt of the Company.
The 10% Notes were sold through an Agent in the form of a Unit. Each Unit was comprised of one 10% Senior Subordinated Callable Note with a par value $25,000, and one five-year warrant to purchase 25,000 shares of the Company’s common stock. The purchase price of each Unit was $25,000, resulting in gross proceeds of $1,250,000.
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In connection with the placement of the subordinated notes, the Company paid a commission of $125,000 and $25,000 of other direct expenses. The agent also received five-year warrants to purchase up to 250,000 shares of the Common Stock at an initial exercise price of $0.25 per share. The agent also received 100,000 shares of restricted common stock for pre-transaction advisory services and due diligence. The commission of $125,000 paid at closing, is accounted for as prepaid financing cost and will be amortized over a forty-month period through January 31, 2013, the maturity date of the notes. The $25,000 of other direct expenses were paid at closing and reported as financing costs in the Operating Statement in the year ended January 31, 2010. In addition, financing costs included $4,000 related to the value of the 100,000 shares granted to the Placement Agent.
The 10% Notes are convertible any time prior to January 31, 2013. The initial conversion rate is 200,000 shares of the Company’s common stock per $25,000 principal amount of the 10% Notes (Subject to certain events). This represents an initial conversion price of $0.125 per share of the Company’s common stock.
On or after January 31, 2012, the Company may, at its option, upon 60 days notice to both the Note-holder’s and the placement agent, redeem all or a portion of the notes at a redemption price in cash equal to 102% of the principal amount of the notes to be redeemed plus accrued and unpaid interest to, but excluding, the redemption date.
The Warrants attached to the Units are exercisable into shares of Common Stock at an initial exercise price of $0.125. The Warrants have a five-year term and expire on October 31, 2014. These warrants were estimated to have a fair value of $2,653 using the Black-Scholes pricing model which was recorded as unamortized warrant discount on granted date and $2,015 as of July 31, 2010.
In connection with this offering, the Company also issued warrants to purchase 250,000 shares of our common stock to the placement agent which were estimated to have a fair value of $2,200 using the Black-Scholes pricing model and was recorded as unamortized warrant discount on granted date. These warrants have an exercise price of $0.25 per share, are exercisable immediately upon issuance and expire five years after the date of issuance.
The Company recorded interest expense of $ 31,250 and $62,500 related to these notes for the three months and six months ended July 31, 2010, respectively. No interest related to these subordinated borrowings was reported for the respective periods in 2009.
12. Related Party Transactions
During the six months ended July 31, 2010 and 2009, the Company generated revenue of $367,000 and $201,135, respectively, by providing management services to ApolloMed Hospitalists (AMH), an affiliated company with common ownership interest. Commencing August 1, 2008, the management services fee income reported by AMM was eliminated in consolidation against similar costs recorded at AMH.
13. Non-Controlling Interest
The Company recorded AMH owner ship interest in the accompanying financial statements as Non-Controlling Interest of $228,115 at July 31, 2010 and January 31, 2010.
14. Stockholder’s Equity
In the second quarter ended July 31, 2010, the Company issued 211,113 common shares to Suresh Nihalani, a Director, under an amendment to his Board of Director's Agreement dated October 27, 2008, which brought the total outstanding shares to 27,635,774 at July 31, 2010. (see Note 15) The Company recorded an expense of $17,100 on shares issued for the period ended July 31, 2010.
In the first quarter ended April 30, 2010, the Company issued 383,333 common shares. A total of 350,000 shares were issued to Kanehoe Advisors and 33,333 shares were issued to Suresh Nihalani, a director. The total shares of 383,333 were valued at $30,066 based on the fair value of shares at issuance dates.
The Company issued a total of 1,171,108 common shares in the twelve months ended January 31, 2010, including 266,665 shares in the second quarter ended July 31, 2009, 826,666 shares in the third quarter ended October 31, 2009, and 77,777 shares in the fourth quarter ended January 31, 2010. The 266,665 shares were issued on May 14, 2009 to nine holders of convertible notes that had exercised their conversion rights. Of the 826,666 shares, 716,666 were issued to officers and directors, 100,000 shares were issued to the Placement Agent for advisory services and 10,000 shares were issued to an employee. The 77,777 shares issued in the fourth quarter were to Suresh Nihalani, a Director of the Company.
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Warrants outstanding:
No warrants were issued by the Company in the six months ended July 31, 2010.
Aggregate
intrinsic value Number of
warrants
Outstanding at January 31, 2010 $— 2,125,803
Granted — -
Exercised — —
Lapsed — 165,620
Outstanding at July 31, 2010 $— 1,960,183
Exercise Price Warrants
outstanding Weighted
average
remaining
contractual life Warrants
exercisable Weighted
average
exercise price
$ 1.100 304,850 0.50 304,850 $1.10
$ 1.500 155,333 1.24 155,333 $1.50
$ 0.250 1,250,000 4.25 1,250,000 $0.25
$ 0.250 250,000 4.25 250,000 $0.25
15. Commitments and Contingency
On March 15, 2009, the Company entered into a Consulting Agreement with Kaneohe Advisors LLC (Kyle Francis) under which Mr. Francis would become the Company’s Executive Vice President, Business Development and Strategy. Under the terms of the Agreement, Mr. Francis will be paid $8,000 per month. In addition, Mr. Francis received 350,000 shares of restricted stock at the date of the Agreement and is entitled to 350,000 additional restricted shares on the first and second anniversaries of the Agreement, provided the Agreement is not terminated. The initial 350,000 shares, along with 50,000 shares granted to Mr. Francis in the year ended January 2009, were issued in the third quarter ended October 31, 2009. On March 15, 2010, the first anniversary of the Consulting Agreement, Mr. Francis was granted an additional 350,000 shares (see Note 14).
On October 27, 2008, the Company entered into a Board of Director’s Agreement with Suresh Nihalani, under which the Company agreed to issue a stock award of 400,000 shares to Mr. Nihalani. Under the terms of the Director’s Agreement, these shares will be issued ratably over a thirty-six month period commencing December 2008. The shares will be released to Mr. Nihalani on a monthly basis during his tenure as a Director. The distribution of shares will continue as long as Mr. Nihalani serves on the Board, but will cease when Mr. Nihalani is no longer a Director. Mr. Nihalani was issued 188,887 shares under this Director's Agreement through April 30, 2010. (see Note 14)
On July 16, 2010, the Company and Mr. Nihalani agreed to amend the October 27, 2008 Director's Agreement, whereby the Company issued 211,113 shares of Common Stock to Mr. Nihalani. These 211,113 shares represented the balance of the shares due Mr. Nihalani under his agreement and brought the total shares held by Suresh Nihalani to 400,000 common shares. Under the Amendment, the Company has the right to repurchase shares in the event that Mr. Nihalani fails to serve as a Director through November 30, 2011.
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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following management’s discussion and analysis should be read in conjunction with the unaudited condensed consolidated financial statements and the notes thereto included in this Quarterly Report. In addition, reference is made to our audited consolidated financial statements and notes thereto and related Management’s Discussion and Analysis of Financial Condition and Results of Operations included in our most recent Annual Report on Form 10-K for the year ended January 31, 2009, filed with the Securities and Exchange Commission ( SEC) on May 18, 2009.
In this Quarterly Report, unless otherwise expressly stated or the context otherwise requires, “Apollo,” “we,” “us” and “our” refer to Apollo Medical Holdings, Inc,, a Delaware corporation, and its wholly-owned subsidiary-management company, Apollo Medical management, Inc., and affiliated medical groups. Our affiliated professional organizations are separate legal entities that provide physician services in California and with which we have management agreements. For financial reporting purposes we consolidate the revenues and expenses of all our practice groups that we own or manage because we have a controlling financial interest in these practices based on applicable accounting rules and as described in our accompanying financial statements. Also, unless otherwise expressly stated or the context otherwise requires, “our affiliated hospitalists” refer to physicians employed or contracted by either our wholly-owned subsidiaries or our affiliated professional organizations. References to “practices” or “practice groups” refer to our subsidiary-management company and the affiliated professional organizations of Apollo that provide medical services, unless otherwise expressly stated or the context otherwise requires.
The following discussion contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 regarding future events and the future results of Apollo that are based on management’s current expectations, estimates, projections, and assumptions about our business. Words such as “may,” “will,” “could,” “should,” “target,” “potential,” “project,” “expects,” “anticipates,” “intends,” “plans,” “believes,” “sees,” “estimates” and variations of such words and similar expressions are intended to identify such forward-looking statements. These statements are not guarantees of future performance and involve risks, uncertainties and assumptions that are difficult to predict. Therefore, actual outcomes and results may differ materially from what is expressed or forecasted in such forward-looking statements due to numerous factors, including, but not limited to, those discussed in our most recent Annual Report on Form 10-K, including the section entitled “Risk Factors”, as well as those discussed from time to time in the Company’s other SEC filings and reports. In addition, such statements could be affected by general industry and market conditions. Such forward-looking statements speak only as of the date of this Quarterly Report or, in the case of any document incorporated by reference, the date of that document, and we do not undertake any obligation to update any forward-looking statement to reflect events or circumstances after the date of this Report, or for changes made to this document by wire services or Internet service providers. If we update or correct one or more forward-looking statements, investors and others should not conclude that we will make additional updates or corrections with respect to other forward-looking statements.
Overview
We are a leading provider of hospitalist services in the Greater Los Angeles, California area. Hospitalist medicine is organized around the admission and care of patients in an inpatient facility such as a hospital or skilled nursing facility and is focused on providing, managing and coordinating the care of hospitalized patients.
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Results of Operations and Operating Data
Three Months Ended July 31, 2010 vs. Three Months Ended July 31, 2009
Apollo reported net revenues of $1,039,695 for the three months ended July 31, 2010, compared to net revenues of $580,942 for the comparable three month period ended July 2009. The revenue increase of $458,753, or 79%, was attributable to new hospital contracts, increased same-market area growth and expansion of services with existing medical group clients at new hospitals. Net revenues are comprised of net billings by AMH under the various fee structures from health plans, medical groups/IPA’s and hospitals, and income from service fee agreements.
Physician practice salaries, benefits and other expenses for the three months ended July 31, 2010 were $864,719, at 83% of net revenues, compared to $387,692 for the three months ended July 31, 2009, at 67% of net revenues. Cost of Services includes the payroll and consulting costs of the physicians, all payroll related costs, costs for all medical malpractice insurance and physician privileges. The increase in physician costs were attributable to start-up losses at new hospital contracts and expansions of services at new hospitals in the quarter.
General and administrative expenses include all salaries, benefits, supplies and operating expenses, not specifically related to the day-to-day operations of our physician group practices, including billing and collections functions, and our corporate management and overhead. General and administrative expenses were $190,516, at 18% of net revenues, for the three months ended July 31, 2010, higher by $68,411 from General and Administrative expenses of $122,105 for the three months ended July 31, 2009, at 21% of net revenues. In the second quarter of 2010, the Company recorded bad debt expense of $25,700 compared to bad debt expense of $1,791in the second quarter of 2009. Legal fees in the second quarter of 2010 of $26,775 compared to legal fees of $10,610. In addition, Apollo recorded an expense of $17,100 related to shares issued to a director, and incurred higher rent, audit and public company costs.
Depreciation and amortization expense was $2,993 for the three months ended July 31, 2010, and $10,338 for the comparable three-month period in 2009.
The Company reported a loss from operations of $18,533 for the three months ended July 31, 2010, compared to a profit from operations of $60,807 recorded in the same period of 2009. Although net revenues in 2010 continued to benefit from the addition of contracts with hospitals and the hiring of several additional physicians, the higher cost of services as a percent of revenue, 84% in the quarter just ended versus 67% in the second quarter of 2009, impeded the operating results.
Interest expense and amortization of financing costs totaled $40,840 for the three months ended July 31, 2010, compared to interest and financing costs of $4,958 in the three months ended July 31, 2009. Interest expense and financing costs in 2010 included interest on the subordinated borrowings of $31,250, and the amortization of financing costs of $9,375, related to these notes. Interest expense in the three months ended July 31, 2009 of $4,958 represents interest expense paid on the SBA loan with Wells Fargo Bank, interest expense on convertible notes and interest expense accrued at AMM for related party notes.
A net loss of $60,130 was reported for the three months ended July 31, 2010, compared to a net income of $55,849 for the three months ended July 31, 2009. The factors contributing to the net loss in the current quarter compared to the net income in the quarter ended July 2009 are discussed above.
15
Six Months Ended July 31, 2010 vs. Six Months Ended July 31, 2009
Net revenues for the six months ended July 31, 2010 of $1,842,580 increased $760,455, or 70 percent, over net revenues of $1,082,125 reported for the six months ended July 31, 2009. Net revenues are comprised of net billings by AMH under the various fee structures from health plans, medical groups/IPA’s and hospitals, and income from service fee agreements. The increase was attributable to new hospital contracts, increased same-market area growth and expansion of services with existing medical group clients at new hospitals.
Physician practice salaries, benefits and other expenses for the six months ended July 31, 2010 were $1,539,405, at 84% of net revenues, compared to $807,247 , at 75% of net revenues, for the six months ended July310, 2009. Cost of Services includes the payroll and consulting costs of the physicians, all payroll related costs, costs for all medical malpractice insurance and physician privileges. The increase in physician costs was attributable to start-up losses on new hospital contracts and expansions of services at new hospitals in the quarter.
General and administrative expenses include all salaries, benefits, supplies and operating expenses, not specifically related to the day-to-day operations of our physician group practices, including billing and collections functions, and our corporate management and overhead. General and administrative expenses were $275,708, at 15% of net revenues, for the six months ended July 31, 2010. General and Administrative expenses were $294,668 for the six months ended July 31, 2009, at 27% of net revenues. In the six months ended July 2010, the Company recorded non-cash compensation expenses of $47,378, related to the issuance of shares for service, lower than the $95,167 of such non-cash costs in the first six months of 2009. Also, the Company recorded a reduction in bad debt expense of $64,566 in the six month period ended July 2010. The Company incurred higher legal fees, rent and consulting fees which partially offset the above two favorable factors. Depreciation and amortization expense was $5,999 for the six months ended July 31, 2010, and $20,675 for the comparable six-month period in 2009.
The Company reported a profit from operations of $21,468 for the six months ended July 31, 2010, compared to a loss from operations of $40,465 recorded in the same period of 2009. Net revenues in 2010 continued to benefit from the addition of contracts with hospitals and the hiring of several additional physicians. In addition, the operating profit in 2010 benefitted from the lower non-cash compensation costs and a favorable adjustment to bad debt expense.
Interest expense and the amortization of financing costs totaled $81,738 for the six months ended July 31, 2010, compared to interest and financing costs of $9,807 in the six months ended July 31, 2009. Interest expense and financing costs in 2010 included interest on the subordinated borrowings of $62,500, and the amortization of financing costs of $18,750, related to these notes. Interest expense in the six months ended July 31, 2009 of $9,807 included interest on the convertible notes, interest expense paid on the SBA loan with Wells Fargo Bank, and interest expense accrued at AMM for the related party notes.
Apollo reported a net loss of $60,973 for the six months ended July 31, 2010, compared to a net loss of $51,072 for the six months ended July 31, 2009. The reduction in the net loss was the result of the factors discussed above.
Liquidity and Capital Resources
At July 31, 2010, the Company had cash and cash equivalents of $534,332, compared to cash and cash equivalents of $665,737 at January 31, 2010. The cash balance at July 31, 2010 included $487,647 in a money market brokerage account. There were no short-term borrowings at July 31, 2010 or January 31, 2010. Long-term borrowings totaled $1,247,985 as of July 31, 2010 and $1,247,582 on January 31, 2010.
16
Net cash used in operating activities totaled $126,248 in the six months ended July 31, 2010, compared to net cash provided by operations of $13,230 for the comparable six months ended July 31, 2009. The large unfavorable adjustment in bad debt expense and the greater increase in accounts receivable in the six months ended July 2010 were responsible for the decrease in the operating cash flow.
Net cash used in operating activities for the three months ended July 31, 2010 of $126,248 was comprised of a net loss of $60,973 for the six month period. Adjustments for non-cash charges which include depreciation, bad debt expense, shares issued for service and amortization of commission cost and debt discount, provided $7,753. In addition, net changes in operating assets and liabilities used cash of $73,028.
The Company invested $4,568 to develop a Web Site and an $800 advance to an affiliated Company during the first six months of 2010. We did not spend any cash for investing activities in the comparable six-month period of 2009.
For the six months ended July 31, 2010, the Company received $211 from the issuance of shares to a director under financing activities. In the six months ended July 2009, net cash used in financing activities totaled $6,655 and consisted of principal pay downs on notes payable totaling $18,741, partially offset by $12,087 of borrowings on the Company's SBA loan with Wells Fargo Bank.
Credit Facility and Liquidity
The Company's Business Line with Wells Fargo Bank provides a revolving line of credit of $70,000, and is linked to the AMH bank account. The line can be used for short-term working capital needs and provides overdraft protection. The line cannot be used for letters of credit. There were no borrowings under this facility during the six months ended July 31, 2010.
We continue to search for investment opportunities and anticipate that funds generated from operations, together with our current cash on hand and funds available under our revolving credit agreement will be sufficient to finance our working capital requirements and fund anticipated acquisitions, contingent acquisition consideration and capital expenditures.
Off Balance Sheet Arrangements
As of July 31, 2010, we had no off-balance sheet arrangements.
Recently Adopted and New Accounting Pronouncements
See Note 2 to the Condensed Consolidated Financial Statements for information regarding recently adopted and new accounting pronouncements.
17
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
The Company does not hold any derivative instruments and does not engage in any hedging activities.
ITEM 4. CONTROLS AND PROCEDURES
Evaluation of Disclosure Controls and Procedures.
In connection with the preparation of this Quarterly Report, we carried out an evaluation, under the supervision and with the participation of our management, including our Chief Executive Officer and Principal Financial and Accounting Officer, of the effectiveness of our disclosure controls and procedures, as of July 31, 2010, in accordance with Rules 13a-15(b) and 15d-15(b) of the Exchange Act.
Based on that evaluation, our Chief Executive Officer and Principal Financial and Accounting Officer have concluded that our disclosure controls and procedures were not effective as of July 31, 2010.
We have identified the following three material weaknesses in our disclosure controls and procedures:
1. We do not have written documentation of our internal control policies and procedures. Written documentation of key internal controls over financial reporting is a requirement of Section 404 of the Sarbanes-Oxley Act. Management evaluated the impact of our failure to have written documentation of our internal controls and procedures on our assessment of our disclosure controls and procedures, and concluded that the control deficiency that resulted represented a material weakness.
2. We do not have sufficient segregation of duties within accounting functions, which is a basic internal control. Due to our size and nature, segregation of all conflicting duties may not always be possible and may not be economically feasible. However, to the extent possible, the initiation of transactions, the custody of assets and the recording of transactions should be performed by separate individuals. Management evaluated the impact of our failure to have segregation of duties on our assessment of our disclosure controls and procedures, and concluded that the control deficiency that resulted represented a material weakness.
3. We do not have review and supervision procedures for financial reporting functions. The review and supervision function of internal control relates to the accuracy of financial information reported. The failure to review and supervise could allow the reporting of inaccurate or incomplete financial information. Due to our size and nature, review and supervision may not always be possible or economically feasible. Management evaluated the impact of our significant number of audit adjustments, and concluded that the control deficiency that resulted represented a material weakness.
Based on the foregoing materials weaknesses, we have determined that, as of July 31, 2010, that our disclosure controls and procedures are insufficient. The Company continues to take steps to improve the timeliness and accuracy of its financial information, including the hiring of additional employees to facilitate proper segregation of duties. Our management is responsible for establishing and maintaining adequate disclosure controls and procedures, as defined in Rule 15d-15(e) under the Exchange Act, and for assessing the effectiveness of our disclosure controls and procedures. It should be noted that any system of controls and procedures, however well designed and operated, can provide only reasonable and not absolute assurance that the objectives of the system are met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of certain events. Because of these and other inherent limitations of control systems, there can be no assurance that any design will succeed in achieving its stated goals under all potential future conditions, regardless of how remote. Therefore, even those systems determined to be effective can only provide reasonable assurance of achieving their control objectives.
18
Changes in Internal Controls over Financial Reporting
There has been no change in our internal control over financial reporting during our most recently completed fiscal quarter (i.e., the six-month period ended July 31, 2010) that has materially affected, or is reasonably likely to materially affect, our internal control over financial reporting.
PART II – OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
The Company is not a party to any litigation and, to its knowledge, no action, suit or proceeding has been threatened against the company.
ITEM 1A. Not Applicable
ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
None
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
None
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
None
ITEM 5. OTHER INFORMATION
None
ITEM 6. EXHIBITS
AMEH.. $0.10 Another hospital..
Apollo Medical Holdings, Inc. Announces New Hospital Contract at Monterey Park Hospital
Business Wire - Jun 04 at 09:00
Company Symbols: NASDAQ-OTCBB:AMEH
GLENDALE, Calif.--(BUSINESS WIRE)-- Apollo Medical Holdings, Inc. (OTCBB:AMEH), a leading provider of hospitalist services to the healthcare community, today announced that ApolloMed Hospitalists, one of its affiliated medical groups, signed a service agreement with Monterey Park Hospital to provide advisory services and inpatient care at the 101-bed facility in Monterey Park, California.
"Monterey Park Hospital is an outstanding facility and we are excited about the opportunity to begin to work with the hospital administration, medical staff and patients," stated Warren Hosseinion, M.D., Chief Executive Officer of Apollo Medical Holdings, Inc. "ApolloMed now has a presence at nineteen hospitals in the Greater Los Angeles area."
"ApolloMed has continued to execute on its vision of providing high quality and efficient care to multiple healthcare payors, facilities and providers," stated Adrian Vazquez, M.D., President and Chairman of Apollo Medical Holdings, Inc.
About Apollo Medical Holdings, Inc.
Apollo is a leading provider of hospitalist services to the healthcare community in the Greater Los Angeles area. The company intends to capitalize on the growing market for hospital-based physicians, such as hospitalists, or physicians with expertise in hospital medicine. There are 4900 acute care hospitals in the U.S., with over 35 million annual admissions. Total U.S. spending on hospital care is over $650 billion, and is expected to increase to $1.3 trillion by 2016. There are tremendous inefficiencies in the delivery of inpatient care and a high rate of hospital errors. Both of these are drivers for the growth of hospital-based medicine. Apollo and its affiliated medical groups have proven expertise in providing excellent and efficient care to hospitalized patients.
To learn more about ApolloMed, please visit our website: www.apollomed.net
Source: Apollo Medical Holdings, Inc.
Copyright Business Wire 2010
Acquire Media Codes:
AMEH.. $0.08 Departure..
ITEM 5.02 DEPARTURE OF DIRECTORS OR CERTAIN OFFICERS; ELECTION OF DIRECTORS; APPOINTMENT OF CERTAIN OFFICERS, COMPENSATORY ARRANGEMENTS OF CERTAIN OFFICERS.
On July 16, 2010, Apollo Medical Holdings, Inc. (the “Company”) and Suresh Nihalani, a member of the Company’s Board of Directors, entered into an amendment (the “Amendment”) to that certain Board of Directors Agreement (the “Director Agreement”), dated October 27, 2008, between the Company and Mr. Nihalani. The Director Agreement is described in greater detail in the Company’s current report on Form 8-K filed on November 5, 2008.
Pursuant to the Director Agreement, Mr. Nihalani was to receive in exchange for his services as a director 400,000 shares of common stock (“Common Stock”) of the Company, which was to be held in escrow until released by the Company in 36 equal monthly installments. In lieu of such arrangement, the Company has been issuing shares of Common Stock to Mr. Nihalani in an amount equal to approximately 11,111 shares on a monthly basis, and Mr. Nihalani has agreed to such arrangement. To date, Mr. Nihalani has been issued 188,887 shares of Common Stock pursuant to these issuances.
Pursuant to the Amendment, Mr. Nihalani was issued 211,113 shares (the “Restricted Shares”), representing the 400,000 shares of Common Stock he was to receive under the Director’s Agreement less the 188,887 shares of Common Stock he has already received, in exchange for $.001 per share, the par value of each share. The Restricted Shares will be subject to repurchase by the Company at par value in the event that Mr. Nihalani no longer serves as a member of the Board of Directors of the Company, provided that Mr. Nihalani will become vested in such shares and such repurchase rights will lapse as to approximately 11,111 of the Restricted Shares each month. Mr. Nihalani may not transfer, assign, encumber or otherwise dispose of any of the Restricted Shares until such Restricted Shares are vested, and any disposition will be subject to applicable securities law.
The Amendment also amends and restates the form of Indemnification Agreement to be entered into between the Company and Mr. Nihalani. The Company and Mr. Nihalani executed the Indemnification Agreement on July 16, 2010. The Indemnification Agreement provides, among other things, that the Company will indemnify Mr. Nihalani, under the circumstances set forth therein, for defense expenses, damages, judgments, fines and settlements incurred by him in connection with actions or proceedings to which he may be a party as a result of his position as a director, officer, employee, agent or fiduciary of the Company, and otherwise to the full extent permitted under the Company’s bylaws and state law.
The preceding summary is subject to, and qualified by, the full text of the Amendment, which is filed as exhibits to this Current Report on Form 8-K.
AMEH.. $0.08 New Contract..
Apollo Medical Holdings, Inc. Announces New Hospital Contract at Monterey Park Hospital
Business Wire - Jun 04 at 09:00
Company Symbols: NASDAQ-OTCBB:AMEH
GLENDALE, Calif.--(BUSINESS WIRE)-- Apollo Medical Holdings, Inc. (OTCBB:AMEH), a leading provider of hospitalist services to the healthcare community, today announced that ApolloMed Hospitalists, one of its affiliated medical groups, signed a service agreement with Monterey Park Hospital to provide advisory services and inpatient care at the 101-bed facility in Monterey Park, California.
"Monterey Park Hospital is an outstanding facility and we are excited about the opportunity to begin to work with the hospital administration, medical staff and patients," stated Warren Hosseinion, M.D., Chief Executive Officer of Apollo Medical Holdings, Inc. "ApolloMed now has a presence at nineteen hospitals in the Greater Los Angeles area."
"ApolloMed has continued to execute on its vision of providing high quality and efficient care to multiple healthcare payors, facilities and providers," stated Adrian Vazquez, M.D., President and Chairman of Apollo Medical Holdings, Inc.
About Apollo Medical Holdings, Inc.
Apollo is a leading provider of hospitalist services to the healthcare community in the Greater Los Angeles area. The company intends to capitalize on the growing market for hospital-based physicians, such as hospitalists, or physicians with expertise in hospital medicine. There are 4900 acute care hospitals in the U.S., with over 35 million annual admissions. Total U.S. spending on hospital care is over $650 billion, and is expected to increase to $1.3 trillion by 2016. There are tremendous inefficiencies in the delivery of inpatient care and a high rate of hospital errors. Both of these are drivers for the growth of hospital-based medicine. Apollo and its affiliated medical groups have proven expertise in providing excellent and efficient care to hospitalized patients.
To learn more about ApolloMed, please visit our website: www.apollomed.net
Source: Apollo Medical Holdings, Inc.
AMEH.. $0.08
06/03 13:38 AMEH ED Form 3 Apollo Medical Holdings, For: Sep 10 Filed by: DEWINTER A NOEL
06/03 13:28 AMEH ED Form 5 Apollo Medical Holdings, For: Jan 31 Filed by: NIHALANI SURESH
06/03 13:05 AMEH ED Form 3 Apollo Medical Holdings, For: Nov 01 Filed by: NIHALANI SURESH
AMEH.. $0.085
Continued progress twards earnings..hank
Results of Operations and Operating Data
Three Months Ended April 30, 2010 vs. Three Months Ended April 30, 2009
Net revenues for the three months ended April 30, 2010 of $802,885 increased $301,702, or 60 percent, over net revenues of $501,183 reported for the three months ended April 30, 2009. Net revenues are comprised of net billings by AMH under the various fee structures from health plans, medical groups/IPA’s and hospitals, and income from service fee agreements. Increase was attributable to new hospital contracts, increased same-market area growth and expansion of services with existing medical group clients at new hospitals.
Physician practice salaries, benefits and other expenses for the three months ended April 30, 2010 were $674,686, at 84% of net revenues compared to $419,554 for the three months ended April 30, 2009, at 84% of net revenues. Cost of Services includes the payroll and consulting costs of the physicians, all payroll related costs, costs for all medical malpractice insurance and physician privileges. Increase in physician costs were attributable to start-up losses at new hospital contracts and expansions of services at new hospitals in the quarter.
General and administrative expenses include all salaries, benefits, supplies and operating expenses, not specifically related to the day-to-day operations of our physician group practices, including billing and collections functions, and our corporate management and overhead. General and administrative expenses were $85,192, at 11% of net revenues, for the three months ended April 30, 2010. General and Administrative expenses were $172,562 for the three months ended April 30, 2009, at 34% of net revenues. In the first quarter of 2010, the Company recorded non-cash compensation expenses of $30,066, related to the issuance of shares for service, compared to $94,500 of such non-cash costs in the first quarter of 2009. In addition, the Company recorded a favorable write-down of its bad debt reserve of $60,647 compared to $462 increase in bad debt reserve in first quarter of 2009.
Depreciation and amortization expense was $3,006 for the three months ended April 30, 2010, and $10,338 for the comparable three-month period in 2009.
The Company reported a profit from operations of $40,001 for the three months ended April 30, 2010, compared to a loss from operations of $101,272 recorded in the same period of 2009. Net revenues in 2010 continued to benefit from the addition of contracts with hospitals and the hiring of several additional physicians. In addition, the operating profit in 2010 benefitted from the lower non-cash compensation costs.
Interest expense and amortization of financing costs totaled $40,044 for the three months ended April 30, 2010, compared to interest and financing costs of $4,849 in the three months ended April 30, 2009. Interest expense and financing costs in 2010 included interest on the subordinated borrowings of $31,523, and the amortization of financing costs of $9,375, related to these notes. Interest expense in the three months ended April 30, 2009 of $4,849 represents interest expense paid on the SBA loan with Wells Fargo Bank, and interest expense accrued at AMM for the related party notes.
Net Loss was $843 for the three months ended April 30, 2010, compared to a net loss of $106,921 for the three months ended April 30, 2009. The reduction in the net loss was the result of the factors discussed above.
Liquidity and Capital Resources
At April 30, 2010, the Company had cash and cash equivalents of $504,540, compared to cash and cash equivalents of $665,737 at January 31, 2010. The cash balance at April 30, 2010 included $486,216 in a money market brokerage account. There were no short-term borrowings at April 30, 2010 or January 31, 2010. Long-term borrowings totaled $1,247,784 as of April 30, 2010 and $1,247,582 on January 31, 2010.
Net cash used in operating activities totaled $155,830 in the three months ended April 30, 2010, compared to net cash used in operations of $17,464 for the comparable three months ended April 30, 2009. The significantly larger increase in accounts receivable, primarily related to new contracts in the first quarter of 2010, was responsible for the decrease in the operating cash flow.
Net cash used in operating activities for the three months ended April 30, 2010 of $155,830 was comprised of a net loss of $843 for the three month period. Adjustments for non-cash charges which include depreciation, bad debt expense, shares issued for service and amortization of commission cost and debt discount, used $17,997. In addition, net changes in operating assets and liabilities used cash of $136,990
The Company invested $4,568 to develop a Web Site and an $800 advance to an affiliated Company in the first quarter of 2010. We did not spend any cash for investing activities in the comparable three-month period of 2009.
For the three months ended April 30, 2010, the Company did not spend any for financing activities. In the first quarter of 2009, ended April 30, 2009, net cash used in financing activities totaled $7,477 and consisted of principal pay downs on the Company's SBA loan with Wells Fargo Bank.
Dear 10:
From last Q: Gross margin was 26%,not 33% as I was hoping. It may not be a bad idea wait it out until gross margin improved back to 35%. If gross margin is caped below 33%,the business model is flawed. No economy of scale and more infusion of capital for future growth!
AMEH.. $0.085.. E-Trade call.
I appears that a random robot supply's the accounts of those that make trades in thin traded penny stocks to make sure that the account has not been violated.. It appears on the surface a good thing but I don't know if I like someone other than my Platinum Client Group having access to my accounts.. If other brokers would do the same it would all but stop fraud trades in thin stocks.. As this is an ongoing process at E-Trade I do wonder out loud if this is a real problem and how many times others end up owning shares of stocks in thier accounts that they never put the actual orders in for..??? hank
AMEH..$0.085
JUST GOT A CALL FROM E-TRADE ASKING IF I HAD PUT IN THE ORDER TO BUY 25k OF AMEH..??? Wonder if they have had problems latly with accounts being compromised.. hank
AMEH.. $0.085..
Bought a few on the news.. Order was for 25K.. Hank
06/04/10 9:36 AM EDT Buy 20000 AMEH Executed @ $0.085 Details | Edit
AMEH.. $0.085 Cross post..
Posted by: Knowledge is King Date: Friday, June 04, 2010 9:03:22 AM
In reply to: 10 bagger who wrote msg# 2801 Post # of 2922
AMEH lands another hospital contract
(PR Wires) PRW: Apollo Medical Holdings, Inc. Announces New Hospital Contrac
t at Monterey Park Hospital
GLENDALE, Calif.--(BUSINESS WIRE)--June 04, 2010--
Apollo Medical Holdings, Inc. (OTCBB:AMEH), a leading provider of
hospitalist services to the healthcare community, today announced that
ApolloMed Hospitalists, one of its affiliated medical groups, signed a
service agreement with Monterey Park Hospital to provide advisory services
and inpatient care at the 101-bed facility in Monterey Park, California.
"Monterey Park Hospital is an outstanding facility and we are excited about
the opportunity to begin to work with the hospital administration, medical
staff and patients," stated Warren Hosseinion, M.D., Chief Executive Officer
of Apollo Medical Holdings, Inc. "ApolloMed now has a presence at nineteen
hospitals in the Greater Los Angeles area."
"ApolloMed has continued to execute on its vision of providing high quality
and efficient care to multiple healthcare payors, facilities and providers,"
stated Adrian Vazquez, M.D., President and Chairman of Apollo Medical
Holdings, Inc.
About Apollo Medical Holdings, Inc.
Apollo is a leading provider of hospitalist services to the healthcare
community in the Greater Los Angeles area. The company intends to capitalize
on the growing market for hospital-based physicians, such as hospitalists,
or physicians with expertise in hospital medicine. There are 4900 acute care
hospitals in the U.S., with over 35 million annual admissions. Total U.S.
spending on hospital care is over $650 billion, and is expected to increase
to $1.3 trillion by 2016. There are tremendous inefficiencies in the
delivery of inpatient care and a high rate of hospital errors. Both of these
are drivers for the growth of hospital-based medicine. Apollo and its
affiliated medical groups have proven expertise in providing excellent and
efficient care to hospitalized patients.
To learn more about ApolloMed, please visit our website: www.apollomed.net
CONTACT: ApolloMed PR Contact:
Kyle Francis, 818-507-4617
SOURCE: Apollo Medical Holdings, Inc.
Copyright Business Wire 2010
ameh 0.096 +20% annual report on yahoo
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AMEH.. - Apollo Medical Industries..APOLLO MEDICAL HOLDINGS, INC.
ApolloMed is a leader in providing hospitals, physician groups and managed care organizations clinical solutions through outsourced hospitalist programs. We are a physician-led group focused on providing, managing, and coordinating the care of hospitalized patients. Over past 10 years we have been able to help our partners improve clinical outcomes, increase patient satisfaction, reduce average length of stay and realize greater efficiencies through the application of best practices and quality management.
ApolloMed currently offers its services at 28 hospitals in the Greater Los Angeles Area. The Company signs exclusive contracts with its partners to staff and manage professional programs for the general care of hospitalized patients. We are able to customize our services to improve patient care and achieve financial and operational benefits for our partners. We tailor each program to meet the needs of our clients and their patients.
To learn more about how ApolloMed can help your organization, please contact us at (818) 396-8050.
BUSINESS SUMMARY |
Apollo Medical Holdings, Inc, together with its subsidiaries, provides management services to medical groups that provide inpatient care services in the United States. The company offers services for hospitals, such as providing care from the emergency room through hospital discharge; admission and care of unassigned and/or uninsured patients; inpatient internal medicine consultation services; emergency room clinical decision unit services; and development of hospital-based physicians programs, including pulmonary, critical care, cardiology, and nephrology. Its services for hospitals also include in-hospital inpatient coverage services; development of evidence-based medicine protocols for common diagnoses; implementation of patient safety guidelines; education of nurses and hospital staff; analysis of statistics via the ApolloWeb, a practice management software program, which allows a physician to enter patient information in real-time; and care of patients at academic medical centers, including the education of medical students, interns, and residents. The company also offers services for health carriers and medical groups, which comprise admission and care of assigned patients; communication with primary care physicians upon admission, during the patient?s hospital stay, and upon discharge; transfer of out-of-network patients back to designated hospitals; and communication with case managers, social workers, and medical group personnel, as well as hospital-based physician consulting services. Apollo Medical Holdings, Inc is headquartered in Glendale, California. |
October 31, 2010 | January 31, 2010 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 501,639 | $ | 665,737 | ||||
Accounts receivable, net | 643,107 | 457,517 | ||||||
Receivable from officers | 8,616 | 23,483 | ||||||
Due from affiliate | 3,900 | 2,850 | ||||||
Prepaid expenses | 46,235 | 30,165 | ||||||
Total current assets | 1,203,497 | 1,179,752 | ||||||
Deferred commission cost, net | 85,938 | 114,063 | ||||||
Property and equipment, net | 7,865 | 11,627 | ||||||
TOTAL ASSETS | $ | 1,297,300 | $ | 1,305,442 | ||||
LIABILITIES AND STOCKHOLDERS' DEFICIT | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable and accrued liabilities | $ | 150,116 | $ | 104,252 | ||||
Total current liabilities | 150,116 | 104,252 | ||||||
Convertible notes, net | 1,248,186 | 1,247,582 | ||||||
Total liabilities | 1,398,302 | 1,351,834 | ||||||
STOCKHOLDERS' DEFICIT: | ||||||||
Preferred stock, par value $0.001 ; | ||||||||
5,000,000 shares authorized; none issued | - | - | ||||||
Common Stock, par value $0.001; 100,000,000 shares authorized, | ||||||||
27,635,774 and 27,041,328 shares issued and outstanding | ||||||||
as of October 31, 2010 and January 31, 2010 | 27,636 | 27,041 | ||||||
Additional paid-in-capital | 986,266 | 939,483 | ||||||
Accumulated deficit | (1,343,019 | ) | (1,241,031 | ) | ||||
Total | (329,117 | ) | (274,507 | ) | ||||
Non-controlling interest | 228,115 | 228,115 | ||||||
Total stockholders' deficit | (101,002 | ) | (46,392 | ) | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | 1,297,300 | $ | 1,305,442 |
For the Three Month Periods Ended | For the Nine Month Periods Ended | |||||||||||||||
October 31, | October 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
NET REVENUE | $ | 1,019,078 | $ | 616,975 | $ | 2,861,658 | $ | 1,699,100 | ||||||||
COST OF REVENUE | 868,119 | 455,183 | 2,407,524 | 1,262,430 | ||||||||||||
GROSS PROFIT | 150,959 | 161,792 | 454,134 | 436,670 | ||||||||||||
Operating expenses: | ||||||||||||||||
General and administrative | 152,013 | 139,557 | 427,720 | 434,225 | ||||||||||||
Depreciation | 2,330 | 9,622 | 8,330 | 30,297 | ||||||||||||
Total operating expenses | 154,343 | 149,179 | 436,050 | 464,522 | ||||||||||||
INCOME/(LOSS) FROM OPERATIONS | (3,384 | ) | 12,613 | 18,084 | (27,852 | ) | ||||||||||
OTHER INCOME/(EXPENSES): | ||||||||||||||||
Interest expense | (31,748 | ) | (15,738 | ) | (94,736 | ) | (25,546 | ) | ||||||||
Financing cost | (9,375 | ) | (25,000 | ) | (28,125 | ) | (25,000 | ) | ||||||||
Other income | 4,292 | - | 4,389 | - | ||||||||||||
Total other expenses | (36,831 | ) | (40,738 | ) | (118,472 | ) | (50,546 | ) | ||||||||
LOSS BEFORE INCOME TAXES | (40,215 | ) | (28,125 | ) | (100,388 | ) | (78,398 | ) | ||||||||
Provision for Income Tax | 800 | 800 | 1,600 | 1,600 | ||||||||||||
NET LOSS | $ | (41,015 | ) | $ | (28,925 | ) | $ | (101,988 | ) | $ | (79,998 | ) | ||||
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING, | ||||||||||||||||
BASIC AND DILUTED | 27,635,774 | 26,805,493 | 27,370,367 | 26,260,574 | ||||||||||||
*BASIC AND DILUTED NET LOSS PER SHARE | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) | $ | (0.00 | ) |
As of July 31, 2010 | As of January 31, 2010 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 534,332 | $ | 665,737 | ||||
Accounts receivable, net | 622,734 | 457,517 | ||||||
Receivable from officers | 23,664 | 23,483 | ||||||
Due from affiliate | 3,650 | 2,850 | ||||||
Prepaid expenses | 12,567 | 30,165 | ||||||
Total current assets | 1,196,947 | 1,179,752 | ||||||
Prepaid commssion cost | 95,312 | 114,063 | ||||||
Property and equipment - net | 10,196 | 11,627 | ||||||
TOTAL ASSETS | $ | 1,302,455 | $ | 1,305,442 | ||||
LIABILITIES AND STOCKHOLDERS' DEFICIT: | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable and accrued liabilities | $ | 114,457 | $ | 104,252 | ||||
Total current liabilities | 114,457 | 104,252 | ||||||
Convertible notes, net | 1,247,985 | 1,247,582 | ||||||
Total liabilities | 1,362,442 | 1,351,834 | ||||||
STOCKHOLDERS' DEFICIT: | ||||||||
Preferred stock, par value $0.001 ; | ||||||||
5,000,000 shares authorized; none issued | - | - | ||||||
Common Stock, par value $0.001; 100,000,000 shares authorized, | ||||||||
27,635,774 and 27,041,328 shares issued and outstanding | ||||||||
as on July 31, 2010 and January 31, 2010 | 27,636 | 27,041 | ||||||
Additional paid-in-capital | 986,266 | 939,483 | ||||||
Accumulated deficit | (1,302,004 | ) | (1,241,031 | ) | ||||
Total | (288,102 | ) | (274,507 | ) | ||||
Non-controlling interest | 228,115 | 228,115 | ||||||
Total stockholders' deficit | (59,987 | ) | (46,392 | ) | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | 1,302,455 | $ | 1,305,442 |
For the Three Months ended | For the Six Months ended | |||||||||||||||
July 31, | July 31, | |||||||||||||||
2010 | 2009 | 2010 | 2009 | |||||||||||||
REVENUES | $ | 1,039,695 | $ | 580,942 | $ | 1,842,580 | $ | 1,082,125 | ||||||||
COST OF SERVICES | 864,719 | 387,692 | 1,539,405 | 807,247 | ||||||||||||
GROSS REVENUE | 174,976 | 193,250 | 303,175 | 274,878 | ||||||||||||
Operating expenses: | ||||||||||||||||
General and administrative | 190,516 | 122,105 | 275,708 | 294,668 | ||||||||||||
Depreciation | 2,993 | 10,338 | 5,999 | 20,675 | ||||||||||||
Total operating expenses | 193,509 | 132,443 | 281,707 | 315,343 | ||||||||||||
PROFIT/(LOSS) FROM OPERATIONS | (18,533 | ) | 60,807 | 21,468 | (40,465 | ) | ||||||||||
OTHER EXPENSES: | ||||||||||||||||
Interest expense | 31,465 | 4,958 | 62,988 | 9,807 | ||||||||||||
Financing cost | 9,375 | - | 18,750 | - | ||||||||||||
Other expense | 757 | - | (97 | ) | - | |||||||||||
Total other expenses | 41,597 | 4,958 | 81,641 | 9,807 | ||||||||||||
INCOME/(LOSS) BEFORE INCOME TAXES | (60,130 | ) | 55,849 | (60,173 | ) | (50,272 | ) | |||||||||
Provision for income tax | - | - | 800 | 800 | ||||||||||||
NET INCOME/(LOSS) | $ | (60,130 | ) | $ | 55,849 | $ | (60,973 | ) | $ | (51,072 | ) | |||||
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING, BASIC AND DILUTED | 27,452,197 | 26,096,306 | 27,342,771 | 25,985,136 | ||||||||||||
*BASIC AND DILUTED NET INCOME/(LOSS) PER SHARE | $ | (0.00 | ) | $ | 0.00 | $ | (0.00 | ) | $ | (0.00 | ) |
As of April 30, 2010 | As of January 31, 2010 | |||||||
ASSETS | ||||||||
CURRENT ASSETS | ||||||||
Cash and cash equivalents | $ | 504,540 | $ | 665,737 | ||||
Accounts receivable, net | 653,672 | 457,517 | ||||||
Receivable from officers | 23,483 | 23,483 | ||||||
Due from affiliate | 3,650 | 2,850 | ||||||
Prepaid expenses | 22,821 | 30,165 | ||||||
Total current assets | 1,208,166 | 1,179,751 | ||||||
Deferred commission cost | 104,687 | 114,063 | ||||||
Property and equipment - net | 13,189 | 11,627 | ||||||
TOTAL ASSETS | $ | 1,326,042 | $ | 1,305,441 | ||||
LIABILITIES AND STOCKHOLDERS' DEFICIT: | ||||||||
CURRENT LIABILITIES: | ||||||||
Accounts payable and accrued liabilities | $ | 95,426 | $ | 104,252 | ||||
Total current liabilities | 95,426 | 104,252 | ||||||
Convertible notes, net | 1,247,784 | 1,247,582 | ||||||
Total liabilities | 1,343,210 | 1,351,834 | ||||||
STOCKHOLDERS' DEFICIT: | ||||||||
Preferred stock, par value $0.001 ; 5,000,000 shares authorized; none issued | - | - | ||||||
Common Stock, par value $0.001; 100,000,000 shares authorized, 27,424,661 and 27,041,328 shares issued and outstanding as on April 30, 2010 and January 31, 2010 | 27,424 | 27,041 | ||||||
Additional paid-in-capital | 969,166 | 939,483 | ||||||
Accumulated deficit | (1,241,873 | ) | (1,241,031 | ) | ||||
Total | (245,283 | ) | (274,508 | ) | ||||
Non-controlling interest | 228,115 | 228,115 | ||||||
Total stockholders' deficit | (17,168 | ) | (46,393 | ) | ||||
TOTAL LIABILITIES AND STOCKHOLDERS' DEFICIT | $ | 1,326,042 | $ | 1,305,441 |
For the three month periods ended April 30, | ||||||||
2010 | 2009 | |||||||
REVENUES | $ | 802,885 | $ | 501,183 | ||||
COST OF SERVICES | 674,686 | 419,554 | ||||||
GROSS REVENUE | 128,199 | 81,629 | ||||||
Operating expenses: | ||||||||
General and administrative | 85,192 | 172,562 | ||||||
Depreciation | 3,006 | 10,338 | ||||||
Total operating expenses | 88,198 | 182,900 | ||||||
PROFIT/(LOSS) FROM OPERATIONS | 40,001 | (101,272 | ) | |||||
OTHER EXPENSES: | ||||||||
Interest expense | 31,523 | 4,849 | ||||||
Financing cost | 9,375 | - | ||||||
Other expense | (854 | ) | - | |||||
Total other expenses | 40,044 | 4,849 | ||||||
LOSS BEFORE INCOME TAXES | (43 | ) | (106,121 | ) | ||||
Provision for income tax | 800 | 800 | ||||||
NET LOSS | $ | (843 | ) | $ | (106,921 | ) | ||
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING, | ||||||||
BASIC AND DILUTED | 27,229,655 | 25,870,220 | ||||||
*BASIC AND DILUTED NET LOSS PER SHARE | $ | (0.00 | ) | $ | (0.00 | ) |
For the Three months ended | For the Nine months ended | |||||||||||||||
October 31, | October 31, | |||||||||||||||
2009 | 2008 | 2009 | 2008 | |||||||||||||
REVENUES | $ | 616,975 | 479,808 | $ | 1,699,100 | 499,603 | ||||||||||
Operating expenses: | ||||||||||||||||
Cost of services - physician practice salaries, benefits and other | 455,183 | 488,605 | 1,262,430 | 531,411 | ||||||||||||
General and administrative | 139,557 | 278,854 | 434,225 | 681,233 | ||||||||||||
Depreciation | 9,622 | 9,996 | 30,297 | 9,996 | ||||||||||||
Total operating expenses | 604,362 | 777,455 | 1,726,952 | 1,222,640 | ||||||||||||
INCOME (LOSS) FROM OPERATIONS | 12,613 | (297,647 | ) | (27,852 | ) | (723,037 | ) | |||||||||
OTHER EXPENSES: | ||||||||||||||||
Interest expense | 15,738 | 5,356 | 25,546 | 5,356 | ||||||||||||
Financing cost | 25,000 | 23,500 | 25,000 | 23,500 | ||||||||||||
Total other expenses | 40,738 | 28,856 | 50,546 | 28,856 | ||||||||||||
NET LOSS BEFORE INCOME TAXES | (28,125 | ) | (326,503 | ) | (78,398 | ) | (751,893 | ) | ||||||||
Provision for income tax | 800 | - | 1,600 | 800 | ||||||||||||
NET LOSS | (28,925 | ) | (326,503 | ) | (79,998 | ) | (752,693 | ) | ||||||||
Net (income) loss attributable to noncontrolling interest | 53,161 | (41,712 | ) | 106,087 | (41,712 | ) | ||||||||||
Net loss attributable to Apollo Medical Holdings, Inc. | $ | (82,086 | ) | $ | (284,791 | ) | $ | (186,084 | ) | $ | (710,981 | ) | ||||
WEIGHTED AVERAGE SHARES OF COMMON STOCK OUTSTANDING, | ||||||||||||||||
BASIC AND DILUTED | 26,805,493 | 25,734,174 | 26,260,574 | 20,063,728 | ||||||||||||
*BASIC AND DILUTED NET LOSS PER SHARE | $ | (0.00 | ) | $ | (0.01 | ) | $ | (0.00 | ) | $ | (0.04 | ) |
Nine months ended October 31, | ||||||||
2009 | 2008 | |||||||
CASH FLOWS FROM OPERATING ACTIVITIES: | ||||||||
Adjustments to reconcile net loss to net cash | ||||||||
(used in) operating activities: | ||||||||
Net loss | $ | (79,998 | ) | $ | (752,693 | ) | ||
Depreciation | 30,298 | 9,996 | ||||||
Bad debt expense | 4,954 | 23,514 | ||||||
Issuance of shares for service | 101,455 | 72,545 | ||||||
Warrant Discount | 9,642 | - | ||||||
Shares issued as finance charge | - | 13,500 | ||||||
Shares issued for consulting expense | - | 67,500 | ||||||
Exercise of notes payable conversion | - | 170,375 | ||||||
Minority Interest | - | 161,512 | ||||||
(Increase) decrease in current assets: | ||||||||
Accounts receivable | (165,874 | ) | (174,457 | ) | ||||
Prepaid expenses | (10,822 | ) | (9,614 | ) | ||||
Prepaid Commission | (123,438 | ) | - | |||||
Due from related party | (800 | ) | (29,897 | ) | ||||
Increase (decrease) in current liabilities: | - | - | ||||||
Accounts payable and accrued liabilities | 46,458 | 17,975 | ||||||
Net cash used in operating activities | (188,126 | ) | (429,743 | ) | ||||
CASH FLOWS FROM INVESTING ACTIVITIES: | ||||||||
Property and Equipment | - | (69,510 | ) | |||||
CASH FLOWS FROM FINANCING ACTIVITIES: | ||||||||
Process from/(Payment to) notes payables | ||||||||
Process from/(Payment to) notes payables- related parties | (75,000 | ) | 70,000 | |||||
Process from/(Payment to) notes convertibles | 1,240,358 | |||||||
Process from/(Payment to) line of credit | (198,000 | ) | 198,000 | |||||
Proceeds from issuance of common stock for cash | - | 335,000 | ||||||
Net cash provided by financing activities | 967,358 | 603,000 | ||||||
NET INCREASE IN CASH & CASH EQUIVALENTS | 779,233 | 103,747 | ||||||
CASH & CASH EQUIVALENTS, BEGINNING BALANCE | 84,161 | 44,352 | ||||||
CASH & CASH EQUIVALENTS, ENDING BALANCE | $ | 863,394 | $ | 148,099 | ||||
SUPPLEMENTARY DISCLOSURES OF CASH FLOW INFORMATION | ||||||||
Interest paid during the year | $ | 13,153 | $ | 3,452 | ||||
Taxes paid during the year | $ | 1,600 | $ | - | ||||
Conversion of notes payable to Equity | $ | 200,000 | $ | - |
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